Exact(10)
The resulting levels of private production and consumption will be less than is socially optimal.The fundamental problem for the allocative efficiency of competitive markets arises from externalities.
The importance of the analysis of social costs arising from externalities is that they may hinder the deployment of specific technologies, even if these technologies appear to be useful based on private costs.
In the case of Bertrand oligopoly, we should expect to see networks in which one firm derives benefits from externalities of all other firms while the latter get no externality.
We find that both forms of technologically advanced capital (ICT and R&D) influence total factor productivity (TFP) over the long run: the former effect derives from externalities related to the use of ICT capital, the latter from knowledge spillovers generated by research performed to produce ICT goods.
A significant number of social interactions involve potential losses of efficiency stemming from externalities or problems with the provision of public goods.
Entrepreneurs may also benefit from externalities of migrant enclaves, such as better access to information or finance (Edin et al. 2003).
Similar(50)
First and foremost, like any mitigation effort, the sector suffers from externality issues: avoided deforestation poses an opportunity cost to the country engaged in it, and this cost increases the more that countries increase regulation.
This assumption is supported by the fact that NGOs entering the project in later years do seem to benefit from positive externalities from experienced Avahan NGOs, possibly due to scale of programme influence and efforts to disseminate programme learnings broadly; and suggests that many of the drivers in inefficiency lie within the control of programme managers and implementers.
We find that when multinationals spread their operations across many geographical markets, they benefit from knowledge externalities more than when they concentrate their activities in few countries.
These other distortions range from additional externalities, practical restrictions on the coverage of corrective taxes, market power, distortions in technology markets, and preexisting tax and regulatory policies.
We find that long-run equilibrium selection depends on a trade-off between efficiency and risk dominance due to the presence of scale effects arising from network externalities.
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