Missing Market: Bridging the Gap, Unraveling the Economics of the Missing Market

By Fouad Sabry

What is Missing Market

A situation in microeconomics known as a missing market occurs when there is a circumstance in which a competitive market that allows for the exchange of a commodity would be Pareto-efficient, but there is no such market.

How you will benefit

(I) Insights, and validations about the following topics:

Chapter 1: Missing market

Chapter 2: Pollution

Chapter 3: Emissions trading

Chapter 4: Environmental economics

Chapter 5: Externality

Chapter 6: Market failure

Chapter 7: Subsidy

Chapter 8: Environmental tax

Chapter 9: Electricity market

Chapter 10: Pigouvian tax

Chapter 11: Free-market environmentalism

Chapter 12: History of capitalist theory

Chapter 13: Government failure

Chapter 14: Vakhsh (river)

Chapter 15: Reservoir

Chapter 16: Environmental policy

Chapter 17: Market (economics)

Chapter 18: CC-PP game

Chapter 19: Market-based environmental policy instruments

Chapter 20: Nonpoint source water pollution regulations in the United States

Chapter 21: Fair river sharing

(II) Answering the public top questions about missing market.

(III) Real world examples for the usage of missing market in many fields.

Who this book is for

Professionals, undergraduate and graduate students, enthusiasts, hobbyists, and those who want to go beyond basic knowledge or information for any kind of Missing Market.

• Language: English
• Publisher: One Billion Knowledgeable
• Release date: Mar 26, 2024

Book preview

Chapter 1: Missing market

In microeconomics, a missing market is a circumstance in which a competitive market permitting the exchange of a commodity would be Pareto-efficient but does not exist.

Various causes might result in missed market opportunities:

A typical example of a missing market is the issue of an externality, like as pollution, in which decision makers are not accountable for part of their actions' repercussions. When a business discharges dirty water into a river, folks who fish in or get drinking water from the river downstream may be harmed, yet the factory owner may have little motivation to consider these implications.

Coordination failure may also impede the establishment of a market. Continuing with the pollution example, downstream neighbors may seek compensation from the factory owner who pollutes their water, but coordination may be difficult due to the free-rider issue.

Technology may also be an obstacle for pollution markets. If a river's banks are lined with several manufacturers, it may be difficult or impossible to determine which industry is responsible for downstream pollution.

Additionally, high transaction costs may inhibit market creation. It is possible that both parties would gain from an exchange of products, but the cost of arranging such an exchange is prohibitive.

The absence of markets might also result from a lack of trust or knowledge. In non-zero-sum interactions, the Nash equilibrium for persons acting independently may be suboptimal if both parties might profit from cooperation but choose not to cooperate. An example would be a shortage of footwear, where one person would like to open a factory to produce shoes and the other would like to produce socks. However, because they are complementary goods, neither has incentive to begin production unless he knows that the other will do the same (see also: prisoner's dilemma). The same holds true for alternative automotive fuels: few filling station owners will be interested in supplying the fuel until alternative-fuel automobiles are on the road, but consumers will not purchase alternative-fuel automobiles until filling stations exist to serve them.

In many instances when markets are absent, the government or another actor may be able to establish conditions that enable market trade. In the case of pollution, assigning property rights in order to facilitate Coase Bargaining is a favored strategy. Futures markets may serve as a signal of cooperation in the event of a lack of information. A solution for ownership is for one party to integrate into both activities, thereby internalizing the advantages, or to utilize the excess created on one side of the market to fund transactions on the other (see two sided markets).

{End Chapter 1}

Chapter 2: Pollution

The act of introducing toxins into natural environments, which then induce changes for the worse, is referred to as pollution.

Air pollution, light pollution, litter, noise pollution, plastic pollution, soil contamination, radioactive contamination, thermal pollution, visual pollution, and water pollution are among the most significant types of pollution.

There are several definitions of pollution, some of which may or may not acknowledge particular forms of pollution, such as noise pollution or pollution caused by greenhouse gases. According to the Environmental Protection Agency of the United States, pollution can be defined as A pollutant is any substance that can be found in water, soil, or air that is harmful to human health, disrupts the senses of sight, taste, or smell, or otherwise degrades the natural quality of the environment. The presence of pollutants and contaminants often reduces the usability of the natural resource. [Case in point:] [Case in point:]

The following is a list of the most prevalent types of pollution, along with the specific pollutants that are associated with each type:

The discharge of chemicals and particles into the atmosphere is what's known as air pollution.

Common gaseous contaminants include carbon monoxide, sulfur dioxide, chlorofluorocarbons (also known as CFCs) and nitrogen oxides are both byproducts of industry and automobiles.

As a result of the reaction between nitrogen oxides and hydrocarbons with sunlight, photochemical ozone and smog are produced.

Particulate matter, or fine dust is characterized by their micrometre size PM10 to PM2.5.

The excessive presence of electromagnetic radiation in its non-ionizing form is known as electromagnetic pollution. Examples of electromagnetic radiation include radio and television broadcasts, Wi-Fi, and so on. There has been no conclusive evidence that this has any impact on people; nonetheless, there may be interference with radio astronomy and affects on the safety systems of airplanes and automobiles.

Light pollution is comprised of light trespass, excessive lighting, and interference with astronomical observation.

The illegal depositing of unsuitable human-made things onto public or private property without first removing them is referred to as littering.

The term noise pollution refers to a wide range of audible disturbances, including those caused by automobiles, airplanes, factories, and high-powered sonar.

Plastic pollution may be defined as the buildup of plastic items and microplastics in the environment to the point that they have a negative impact on people, animals, or habitats for wildlife.

Chemicals that seep into the ground or are accidentally discharged into the environment might contaminate the soil. Hydrocarbons, heavy metals, MTBE, herbicides, pesticides, and chlorinated hydrocarbons are some of the most important pollutants that may be found in soil. Other contaminants include

Radioactive contamination, the outcome of actions in atomic physics carried out in the 20th century, such as the creation of nuclear power and the research, manufacturing, and deployment of nuclear weapons. (For further information, see the section on alpha emitters and actinides in the environment.)

The term thermal pollution refers to a rise in temperature in natural water bodies that is brought on by human activity, such as the use of water as a coolant in power plants.

Visual pollution may refer to the presence of scarred landforms (such as those left behind by strip mining), open storage of rubbish, municipal solid waste, or space debris. Other examples of visual pollution include billboards along highways and overhead power lines.

Water pollution caused by the discharge of industrial wastewater from commercial and industrial waste (intentionally or through spills) into surface waters; discharges of untreated sewage and chemical contaminants, such as chlorine, from treated sewage; release of waste and contaminants into surface runoff flowing to surface waters (including urban runoff and agricultural runoff, which may contain chemical fertilizers and pesticides; also including human feces from open defecation) Water pollution caused by the discharge of industrial wastewater from commercial and industrial waste (intention

A waste substance that pollutes the air, water, or land is referred to as a pollutant. The chemical type of a pollutant, the concentration of the pollutant, the area that is impacted, and how long the pollutant stays in the environment are the elements that define the severity of a