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

Economic literature policy instrumentation, In economic literature policy i...

In economic literature policy instrumentation has usually been discussed from normative point of view. In particular, the analytical apparatus of welfare theory is well equipped t

Economics of renewable resources, Normal 0 false false fals...

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

Welfare and subsidies, what are the costs and consequences of providing the...

what are the costs and consequences of providing the subsidies and welfare?

Flaws in conventional system - focus, Normal 0 false false ...

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

Created new understandings of urban leisure, How has public policy helped t...

How has public policy helped to shape the way that urban Americans have spent their leisure time throughout the period that we have examined in class? Have such policies hindered a

Examine the reasons for a country to engage in free trade, Problem 1: i...

Problem 1: i) According to you the Central Electricity Board in Mauritius operates in which type of market structure? Justify your answer. ii) Compare and contrast a perfe

Describe the public economics, Public Economics can broadly be understood a...

Public Economics can broadly be understood as that Economics which deals withpublic intervention in the economy. Its domain is supposed to encompass rationalefor public interventio

Discuss various factors that influenced the agenda setting i, Explain the s...

Explain the stages and various coordination mechanisms involved in policy processes. Discuss various factors that influenced the agenda setting in policy processes

Pareto improvement, 1. is pareto improved demonstrated using the edgeworth ...

1. is pareto improved demonstrated using the edgeworth box daigram?

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