Are markets always the best method for delivering products and services? Are there scenarios in which government intervention can improve welfare? This module builds on and extends what you have learnt in previous microeconomics modules.
You’ll develop a deeper understanding of how companies make decisions and analyse how this behaviour is impacted by available production technologies, the level of competition in the market, the existence of externalities, and the characteristics of the goods to be produced.
You’ll examine market characteristics and the strategic aspects of individual decision making which may lead to market failures. This will provide insights into the types of government intervention that can improve market outcomes in real-world situations. These can include the reduction of anti-competitive behaviour, tackling environmental externalities, and ensuring efficient provision of public goods.
We’ll explore policy interventions which can move individual decisions towards more efficient outcomes, such as competition policy, taxes, and tradable permits. Additionally, we'll explore how societies, rather than individuals, can make collective decisions over resource allocation when preferences differ across the population, which is particularly relevant in the case of public goods.