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On Internalization of Externalities

Author

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  • Gupta, Anil K.
  • Prakash Aseem

Abstract

Externalities can be internalized through market mechanism, government regulation, or self-governing institutions or a mix of these institutions. We recommend the institutional route which minimizes total cost (sum of technology, management, and transaction costs) to the firm. These costs are influenced by the externality attributes (occurrence, polluter, spatial, time and technology). Different institutions may be appropriate for different stages and social contexts of an externality.

Suggested Citation

  • Gupta, Anil K. & Prakash Aseem, 1993. "On Internalization of Externalities," IIMA Working Papers WP1993-08-01_01202, Indian Institute of Management Ahmedabad, Research and Publication Department.
    • Handle: RePEc:iim:iimawp:wp01202
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    Cited by:

    1. Chokkakula Srinivas & Muralikrishna S & Patel Kirit K & Sinha Riya & Gupta, Anil K., 2004. "Harnessing Wisdom for Managing Watersheds: Honey Bee Perspective on Innovations, Institutions and Policies for Marginal Environments," IIMA Working Papers WP2004-07-02, Indian Institute of Management Ahmedabad, Research and Publication Department.
    2. Jascha-Alexander Koch & Jens Lausen & Moritz Kohlhase, 2021. "Internalizing the externalities of overfunding: an agent-based model approach for analyzing the market dynamics on crowdfunding platforms," Journal of Business Economics, Springer, vol. 91(9), pages 1387-1430, November.

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