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

Valuation tools - hedonic pricing method, Valuation Tools - Hedonic Pricing...

Valuation Tools - Hedonic Pricing Method Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Volume of production, what is volume of production and the factors influenc...

what is volume of production and the factors influencing them

Public sector, Are there any welfare or subsidy payments that should be ren...

Are there any welfare or subsidy payments that should be renewed or added? 2.What are the costs and consequences of providing the subsidies and welfare? 3.Are there any current sub

Agenda setting, Explain the stages and various coordination mechanism nvolv...

Explain the stages and various coordination mechanism nvolved in policy processes

Annotated bibliography guidelines, The purpose of this assignment is to pro...

The purpose of this assignment is to provide you an opportunity to enhance your skills related to use of APA format to cite references and selection of research articles most relev

Development of green indicators , Development of Green Indicators ...

Development of Green Indicators Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Healthcare Ecpnomics, Suppose a given demand curve for massage therapy serv...

Suppose a given demand curve for massage therapy services. In the context of giving massage therapy services, list, and explain in detail, 5 different variables that may cause an i

Affirmative action and anticorruption programme, A change in the legal stat...

A change in the legal statute may be able to force an equilibrium if it leads to a new equilibrium which implies some revised belief which sustains the equilibrium. Tirole (1996)

Valuation of environment, Normal 0 false false false EN...

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

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