Various policy mechanisms can be used to correct these market failures
These corrective mechanisms can be broadly categorized by the number of parties involved
Small numbers cases: Few parties are involved, say two or three
Large numbers cases: Many parties are involved, perhaps thousands or millions
Small numbers cases are situations in which the number of involved parties is small enough to meaningfully engage in negotiation or litigation
When the number of involved parties is large, however, different policy mechanisms must be used
For example, the number of parties affected by vehicle use, and the associated problems of air quality and congestion, reach into the hundreds of millions in this country alone. In these situations, liability and negotiation are often impractical
Policy mechanisms that are appropriate for such large numbers cases include:
Directives
Taxes
Permits
An exception to relying on those mechanisms arises when many parties can be represented by a single litigant or negotiator, such as in a class-action lawsuit
1. Which approach would you use in a large numbers case and why?
note; please provide an answer as it relates to question number #2 in the previous assignment.
Please provide an example for question #2 in the previous assignment and any other data