Explain ex-post heterogeneity, Public Economics

Assignment Help:

The other type is called ex-post heterogeneity which refer to the conflict (of interests) arising due to distributional implications of the public policy. Thus when a public policy has some distributional consequences, representative agents will be in conflict over distribution due to their respective "self interests". Ex-ante heterogeneity is important not only for distributive implications but also for understanding of the political aspects of the representative agents. It is also important in understanding of the time inconsistency problem of the policy process which arises when a policy maker maximizes welfare of a ‘representation agents'. In such situation, agents may, with respect to policy benefits, be identical ex-ante but are not identical ex-post.

Among non-political dimensions, we find markets being driven by heterogeneity but then the effects of heterogeneity are quite different. Further, in multiple agent welfare economics ex-ante and ex-post heterogeneity of agents is central to the analysis of optimal policy. Here it should be understood that welfare economics takes multi agent objective function as given, and weights the importance of heterogeneous agents for social welfare. Here ‘opinions' of different agents are taken as exogenous while determining the policy outcomes. Thus the focus of analysis remains only the calculations of optimal policy given the objective function.

In contrast, in public process, the main focus is often the endogenous determination of the objective which is maximized implicitly. Here weighs of the implied objective function are not exogenous. They are determined by the political process which in turn determines the outcome of the policy.


Related Discussions:- Explain ex-post heterogeneity

Pareto graphs, explanation and justify the condition of pareto optimality a...

explanation and justify the condition of pareto optimality and verify the defination of contrect curve. statment; reallocation of the resources from 1 efficient point to another ef

Classification of externality, Normal 0 false false false ...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Pluralist society, what are the strengths and limitations of a pluralist so...

what are the strengths and limitations of a pluralist society

Why do people earn different amounts of wages, Question 1: i) Describe ...

Question 1: i) Describe the concept of circular flow of income. ii) Comment on the view that ‘GDP is the best measure to evaluate economic growth and standard of living'. iii)

Monitoring any proposed legislation and regulations, Question 1: "The o...

Question 1: "The only social responsibility of business is to increase its profits" wrote Milton Friedman, Economics Nobel prize winner, in an article in the New York Times Mag

Uses of revised indicators of national wealth, Normal 0 false ...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

A model of fishery - bionomic model, Normal 0 false false f...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Elements of complexity theory, Since complexity theory as a tool, has not b...

Since complexity theory as a tool, has not been included in the standard tool kits of our economics courses, it is pertinent to have a basic idea of before proceeding to apply to t

How state should intervene through government apparatusin, Why and how the ...

Why and how the State should intervene through government apparatusin the economic sphere of the country, has been a significant discourse in economicsfor long. According to one th

Public speaking, which fallacies best diiscribe this statement The restaura...

which fallacies best diiscribe this statement The restaurant in new is either buddy''s bistro or Clyde emporium

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd