When Markets Fail

Peter Van Doren joins Aaron and Trevor to answer questions about market failure and the provision of public goods.

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What does it mean to say that something is a market failure and that public policy ought to fix it? Can the government actually provide these goods? How often do these situations occur? What does economics have to say about these public goods problems?

Van Doren explains several key economic concepts, including the economist’s definition of a public good, Pareto optimality, and Cosean bargaining.

Peter Van Doren is a senior fellow at the Cato Institute and editor of the quarterly journal Regulation. He is an expert in the regulation of housing, land, energy, the environment, transportation, and labor, and has taught at the Woodrow Wilson School of Public and International Affairs (Princeton University), the School of Organization and Management (Yale University), and the University of North Carolina at Chapel Hill.