When Chickens Compete...

Competition that is desirable in one market, such as chicken, may be a catastrophe in another, such as energy.

Abstract

A basic principle for economists is that competition in markets is generally good, especially when market failures are absent, as in the case of public goods and externalities. Who would be willing to finance a public good—a public square, say—if, once built, no one can be excluded from its benefits? Externalities, in turn, prevent the costs and benefits of producing a good from being fully reflected in market prices. Continue reading...