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David Friedman - What Does Law Have To Do With Economics?

The Curious Task

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Market Failure in the Private Market

In the political system, that's almost always the case. If a judge makes a decision which makes the world a hundred million dollars worse off, he never pays any of that hundred million. So our mechanisms for making the government do the right thing, including the court system, are very weak mechanism. We try to do it through democratic voting but then the voter is facing a market failure situation. And so we end up with trum fers espidn, which is not the ideal par of candidatea a. The public good problem is, a, i'm producing something that benefits a bunch of people and I have no way of controlling who gets it, so how do i charge for

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