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

Public services relative to privately produced goods, Industries in the cou...

Industries in the country of Technologia invest in latest equipment that annually enhance productivity of private workers by three percent. Government employees do not profit from

#title.public debt.., what is public debt. ? give complate information on p...

what is public debt. ? give complate information on public debt. ?

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

Indifference curve, eiplain why indifference curve are convex to the origin...

eiplain why indifference curve are convex to the origin

impact of environmental functions , Normal 0 false false ...

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

Public policies, Part I. We have examined federal public policies in the c...

Part I. We have examined federal public policies in the context of the democratic political system in the US.     Types of policy legislation/behavior fall into 3 main types. A

Similarities between physical capital and natural capital, Normal 0 ...

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

Complex systems as tool for policy process, Quantitative policy process dep...

Quantitative policy process depends on a portfolio of tools that have been drawn from a variety of disciplines besides discretionary political decision. Over the past two decades

Welfare and subsidies, Are there any current subsidy or welfare issues that...

Are there any current subsidy or welfare issues that are being discussed or addressed in parliament or municipalities?

Economic growth and world trade, The major economies in the world are in a ...

The major economies in the world are in a deep recession although there are some signs of growth. What implications has such a recession had for international business? How have go

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