LAW 525 Chapter Notes - Chapter 1: Market Failure, Externality
11 Feb 2014
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Document Summary
Claw525 law of the marketplace week 1. 3 phases of process: pre-transaction, actual transaction, post-transaction phase. Terms, conditions, warranties and guarantees are stipulated. Consumer information is collected: privacy issues, who can see your information online, etc. Redress: remedies for broken products, etc. Consumer information is used: cross-selling another product, etc. Consumer information is exchanged with third parties. Common law: court made law (e. g. contract law; tort law) Basic framework for market transactions arises from: contract law, tort law. Obligations imposed by the common law (i. e. courts) Society may conclude such a framework is inadequate leading to legislation & regulations. Legislation & regulations created by government to further protect consumers from. Information failures: dominant player(s) prevent competitors from market entry, unknown costs are assumed by consumer (e. g. unknown hazards & risks) a. Information imbalance businesses know their products (including hazards & attributes) better than consumer. Prohibition the sale of certain products to certain consumers (e. g. age, license)
