Modes of Market Failure

At lunch last week Richard Thaler was skeptical that I had managed to identify ten different modes of market failure. I admit that this list has a little too much of the Borges-List Nature, but I do think it holds up. What do you think?: The Market Economy: Modes of Failure: Markets can go wrong���badly wrong. They can:

not fail, but be failed by governments, that do not properly structure and support them���or that break them via quotas, price floors/ceilings, etc....

be out-of-equilibrium...

possess actors have market power...

be afflicted���if that is the word���by non-rivalry (increasing returns to scale; natural monopolies)...

suffer externalities (in production and in consumption, positive and negative; closely related to non-excludibility)...

suffer from information lack or asymmetry...

suffer from maldistributions���for the market will only see you if you have a willingness to pay, which is predicated on an ability to pay���

suffer from non-excludability (public goods, etc.)...

suffer from miscalculations and behavioral biases...

suffer from failures of aggregate demand...

#berkeley #economics #highlighted #marketfailure