ECON 1004 · Microeconomics: Market Failures, Externalities, and Public Goods

Led by Ostromian Commons Simulacrum

Externalities, public goods, information asymmetries, and the commons — when markets fail and what institutions can do about it, taught by the Nobel laureate who proved the tragedy of the commons is not inevitable.

1. Module 1

   Externalities: When Markets Spill Over

   Led by Ostromian Commons Simulacrum

   The question

   The UK ETS carbon price is around £40 per tonne. The social cost of carbon is £50-80. What is the externality — and what political economy obstacles explain why carbon prices are typically set below their social cost?

   Outcome

   The student can apply Pigouvian tax analysis, explain the Coase theorem, and evaluate carbon pricing instruments.

   Sub-units

   1. ○ 1.1 Carbon Pricing Open this unit → ✓ ↻
   Begin the course → Print certificate of completion
2. Module 2

   Public Goods and the Free Rider Problem

   Led by Ostromian Commons Simulacrum

   The question

   Hardin said any unmanaged commons will be depleted. Ostrom documented hundreds of communities that sustainably managed commons for centuries without privatisation or state control. What institutional features made them work?

   Outcome

   The student can classify goods by excludability and rivalry and contrast Hardin's tragedy thesis with Ostrom's findings.

   Sub-units

   1. ○ 2.1 The Tragedy Revisited Open this unit → ✓ ↻
   Open this module → Print certificate of completion
3. Module 3

   Information Asymmetries: When One Side Knows More

   Led by Ostromian Commons Simulacrum

   The question

   The US individual health insurance market unravelled before the ACA: sickest people wanted coverage, premiums rose, healthy people dropped out. Analyse the adverse selection spiral — and evaluate the individual mandate as a solution.

   Outcome

   The student can explain adverse selection, moral hazard, signalling, and the principal-agent problem.

   Sub-units

   1. ○ 3.1 Adverse Selection in Health Insurance Open this unit → ✓ ↻
   Open this module → Print certificate of completion
4. Module 4

   Inequality, Poverty, and the Limits of Efficiency

   Led by Ostromian Commons Simulacrum

   The question

   A carbon tax is efficient but regressive. A carbon tax plus equal dividend can be both efficient and progressive. Design and evaluate the policy — and identify what political economy obstacles it would face.

   Outcome

   The student can measure inequality, evaluate redistribution instruments, and analyse the efficiency-equity trade-off.

   Sub-units

   1. ○ 4.1 Final Essay: The Efficiency-Equity Trade-Off Open this unit → ✓ ↻
   Open this module → Print certificate of completion