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

Is heterogeneity the sole cause of conflict of interests, Q. Is Heterogenei...

Q. Is Heterogeneity the sole cause of conflict of interests? Explain heterogeneity as a cause of variation of aspirations of agents leading to formation of various special inte

Economic growth, Define the concept of economic growth?

Define the concept of economic growth?

ECON403, Jack and Jill live alone on an island. Their labour supply schedu...

Jack and Jill live alone on an island. Their labour supply schedules are identical and given by L = (1 - t)w, where t is the income tax rate and w denotes the wage. Jill''s wage

Health and safety control systems, The report which you should submit to me...

The report which you should submit to me should include: A brief analysis of the control systems required for the health and safety of operatives and others who may be affect

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

Nations of the commonwealth, The international monetary fund and the World ...

The international monetary fund and the World Bank are the main lending financial institutions that give assistance to developing nations in the restoration of their economy. Wh

Flaws in conventional system - representation, Flaws in Conventional System...

Flaws in Conventional System - Representation Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplore

Cost-based methods - restoration cost, Normal 0 false false ...

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

TAXATION, what are the taxations most important of Colombia country

what are the taxations most important of Colombia country

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