IDEAS home Printed from https://ideas.repec.org/p/ags/uwarer/269057.html
   My bibliography  Save this paper

External Effects: An Alternative Formulation

Author

Listed:
  • Cornes, Richard

Abstract

Economists have long since recognised that the actions of individual agents may affect the decisions or the well being of others in important ways without necessarily being mediated through the market. This recognition has spawned a large evergrowing literature. When modeling the behaviour of consumers, this literature has generally used the direct utility function as the basic tool of analysis. In this paper, we discuss the use of alternative, dual formulations of consumer behaviour. In section III we discuss the use of the minimum expenditure function and of the indirect utility function in modeling the behaviour of an individual consumer who acts as a price taker in markets for tradable commodities and as a quantity taker in his consumption of certain environmental commodities. Subsequently, we look at a simple model involving reciprocal externalities which has recently been the subject of discussion by Diamond and Mirrlees (1973), Sandmo (1978), Sadka (1978) and Sheshinski (1978). Part of this literature deliberately abstracts from real income effects, and in discussing this part we find the minimum expenditure function and its associated compensated demand functions particularly fruitful. It is our belief that the dual approach serves to clarify a number of issues in this area.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Cornes, Richard, 1979. "External Effects: An Alternative Formulation," Economic Research Papers 269057, University of Warwick - Department of Economics.
  • Handle: RePEc:ags:uwarer:269057
    DOI: 10.22004/ag.econ.269057
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/269057/files/twerp159.pdf
    Download Restriction: no

    File URL: https://ageconsearch.umn.edu/record/269057/files/twerp159.pdf?subformat=pdfa
    Download Restriction: no

    File URL: https://libkey.io/10.22004/ag.econ.269057?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:clg:wpaper:2010-05 is not listed on IDEAS
    2. Luca Corazzini, Ugo Gianazza, 2006. "Asymmetric Contributions from Identical Agents in a Local Interaction Model," ISLA Working Papers 24, ISLA, Centre for research on Latin American Studies and Transition Economies, Universita' Bocconi, Milano, Italy, revised Mar 2007.
    3. Luca Corazzini, 2004. "Equilibrium Contributions and “Locally Enjoyed” Public Goods," Working Papers 84, University of Milano-Bicocca, Department of Economics, revised Nov 2004.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:uwarer:269057. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://warwick.ac.uk/fac/soc/economics/research/workingpapers/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.