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

Choice of mbis, Normal 0 false false false EN-IN X-NO...

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

Size maximizing, why-this-behavior-consistent-with-size-maximizing-governme...

why-this-behavior-consistent-with-size-maximizing-government

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

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

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

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

Environment economic, A dam is proposed on a stretch of wild river, a river...

A dam is proposed on a stretch of wild river, a river that is currently used for recreation. The dam will generate electricity. The dam will have a useful life of 50 years, after w

Economic of labour market, What is the link between efficiency wages and sh...

What is the link between efficiency wages and shirking? There are two firms A and B identical in all respects except the following. In firm A increased expenditure on monitoring co

Horners method - c program, Horners method -  C program: Modify the p...

Horners method -  C program: Modify the program to implement the details for the recursive function called horners(double b, int n) that calculates Horner's method for a coeff

Privatization, privatization can always decentralise economic power. critic...

privatization can always decentralise economic power. critically discuss

Decision process - welfare economics, One shortcoming of neoclassical welfa...

One shortcoming of neoclassical welfare economics is that it does not take into account the institutional structure of collective decision making. To draw normative conclusions abo

Public economics, explain the stages and various coordination mechanisms in...

explain the stages and various coordination mechanisms involved in policy process?

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