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

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

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

Information as intervention and political process, Rules concerning disclos...

Rules concerning disclosure of information and accounting change behaviour but only be drawing attention to certain facts. In the area of environment, Health, epidemics, and other

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

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

Discuss why you believe our urban public schools , Recent standardized test...

Recent standardized test scores suggest that the Milwaukee Public School system is facing a profound moment of crisis, a reality shared by school districts in many other US cities.

Explain hoe perception affected theory symbolic interaction, Assignment Th...

Assignment This assignment will provide you with insight on how others perceive you. It will be particularly useful in situations in which you find differences in self-other resul

Explain the main causes of unemployment, Problem 1: i) Define the th...

Problem 1: i) Define the three main Economic Systems? ii) How can knowledge on price, income and cross price elasticity of demand, be helpful to the Government and a firm,

Elements of complexity theory, Since complexity theory as a tool, has not b...

Since complexity theory as a tool, has not been included in the standard tool kits of our economics courses, it is pertinent to have a basic idea of before proceeding to apply to t

Foreign trade and capital flow problem, In the wake of the Asian financial ...

In the wake of the Asian financial crisis, policymakers, governments, and academics around the world are busy devising ways to reform the global financial architecture. The plethor

Classification of externality, Normal 0 false false false ...

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

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

Development of Green Indicators 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