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- Title
Externalities, Liability, Separability, and Resource Allocation.
- Authors
Marchand, James R.; Russell, Keith P.
- Abstract
This article analyzes and compares the allocative properties of a model containing externalities in which there are alternative environments facing decision makers. The author postulates the existence of a production externality and analyze the effects on resource allocation of the imposition of liability for such externalities and the solicitation of compensation or a bribe from the affected party by the externality generating firm. As stated, the author's findings indicate that the allocation of resources in these alternative environments is directly related to the form of the cost function.
- Subjects
DECISION making; RESOURCE allocation; EXTERNALITIES; PERSONNEL management; ECONOMICS; MANAGEMENT; INDUSTRIAL relations; TRANSACTION costs
- Publication
American Economic Review, 1973, Vol 63, Issue 4, p613
- ISSN
0002-8282
- Publication type
Article