When transactions costs are high or free-rider problems exist, a private remedy for an externality may be feasible.

Name: When transactions costs are high or free-rider problems exist, a private remedy for an externality may be feasible.
Brand: Quizplus
Rating: 4.8 (51 reviews)

Question

Quizplus · Accepted Answer

High transaction costs or the presence of free-rider problems can make private solutions to externalities less feasible, as they hinder the ability of parties to negotiate solutions (Coase Theorem) or to collectively act in a way that internalizes the externality.

When Transactions Costs Are High or Free-Rider Problems Exist, a Private