Markaðsbresti

Markaðsbresti, or market failures, occur when the free market fails to allocate resources efficiently. This means that the goods and services produced or not produced do not align with what society desires or needs. Several factors can lead to market failures.

One common cause is externalities, which are costs or benefits that affect a third party not directly involved in a transaction. For example, pollution from a factory is a negative externality, imposing costs on the community that are not reflected in the price of the factory's products. Conversely, vaccination programs can create positive externalities by reducing disease transmission for everyone.

Another market failure arises from public goods. These are goods that are non-excludable (people cannot be prevented from using them) and non-rivalrous (one person's use does not diminish another's). Examples include national defense or clean air. Because individuals can benefit without paying, private firms have little incentive to provide these goods, leading to underproduction.

Information asymmetry is also a source of market failure. This occurs when one party in a transaction has more or better information than the other. For instance, a seller of a used car might know about hidden defects that a buyer does not, leading to an inefficient outcome where the buyer overpays or the seller cannot sell the car at a fair price.

Monopolies and oligopolies can also lead to market failures by restricting output and raising prices above competitive levels, reducing overall economic welfare. In these situations, the lack of competition distorts market signals and leads to inefficient resource allocation. Governments often intervene to address market failures through regulations, taxes, subsidies, or direct provision of goods and services.