markkinahävikistä

Markkinahävikki, or market failure, refers to a situation in economics where the allocation of goods and services by a free market is not efficient. This means that the market, left to its own devices, fails to produce the optimal outcome for society. In a perfectly functioning market, resources are allocated to their most valued uses, leading to maximum overall welfare. However, several factors can disrupt this efficiency.

One common cause of markkinahävikki is the presence of externalities. These are costs or benefits that affect a party who did not choose to incur that cost or benefit. For example, pollution from a factory is a negative externality, as it imposes costs on society (e.g., health problems, environmental damage) that are not borne by the factory owner. Conversely, a vaccination campaign can create positive externalities, as it not only protects the vaccinated individual but also reduces the spread of disease to others.

Another significant factor is the existence of public goods. These are goods that are non-excludable (people cannot be prevented from consuming them) and non-rivalrous (one person's consumption does not diminish another's ability to consume them). Examples include national defense or street lighting. Because individuals can benefit from public goods without paying for them, private markets tend to under-provide them, leading to a market failure.

Information asymmetry, where one party in a transaction has more or better information than the other, can also lead to market failure. This can result in inefficient pricing and suboptimal decisions. Monopolies and other forms of market power can also distort resource allocation by restricting output and charging higher prices than would prevail in a competitive market. Governments often intervene through regulations, taxes, subsidies, or direct provision of goods and services to correct these market failures.