Economics 2150A/B Lecture Notes - Risk Aversion, Excise, Strategic Dominance

• School: Western University
• Department: Economics
• Course: Economics 2150A/B
• Professor: Kristin Denniston

Document Summary

Homework 5: due tuesday april 8 at midnight. April 26 2pm: room lh105, bring, calculator, #2 pencil, id. It doesn"t matter who has the property rights the result will be the same. *know under what conditions it applies, and what the results are (private parties can solve the problem) Example: farmer a has cattle that damage the crops of farmer b. If nothing is done, they will cause of damage: two cases, b has property rights. They would sue a for the damage to their property. A would pay to fence their own property (it is cheaper than fencing. B"s property, a cost of : a has property rights (and are allowed to let their cattle roam) It won"t matter who has the property rights, the solution will be the same. B will offer to fence a"s property, because it is a lower cost solution for him than to pay the damage.