Learning objectives
Explain how production quotas, prohibitions and licences control the quantity of a good or activity, and evaluate how well they correct market failure
Explain how assigning or extending property rights allows private bargaining to reduce externalities, and when this fails
Evaluate nationalisation and privatisation, and regulation and deregulation, as responses to natural monopoly and other market failures
Explain behavioural insights and nudge theory, such as default options, framing and choice architecture, and assess their use in correcting market failure
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