RWE: Market Failure

Who (Common Pool Resources)

Fishing industry in Iceland

what (Common Pool Resources)

Overfishing threatened fish stocks

where (Common Pool Resources)

iceland

when (Common Pool Resources)

1980’s

why (Common Pool Resources)

Fish are rivalrous but difficult to exclude people from using

how (Common Pool Resources)

Excessive fishing depleted shared resources until quotas were introduced by the government

who (Public Goods)

helsingborg residents

what (Public Goods)

Stadsparken is a free park that is accessible to everyone

where (Public Goods)

helsingborg

when (Public Goods)

ongoing

why (Public Goods)

Because these are public goods, the private market wouldn't provide them efficiently. If a private company owned the park, they might charge an entrance fee. creates free rider problem

how (Public Goods)

It is funded through taxation rather than direct usage fees

who (Asymmetric Information)

air bnb hosts and guests

what (Asymmetric Information)

Short term property rentals

where (Asymmetric Information)

global

when (Asymmetric Information)

still happening

why (Asymmetric Information)

The Host knows exactly what is wrong with the apartment (loud neighbors, a leaky shower, or a broken Wi-Fi), whereas the Guest only sees curated, professional photos.

how (Asymmetric Information)

To fix this "information gap," Airbnb uses a Mutual Rating System. By allowing guests to leave public reviews and verified photos, they force the host to be honest, reducing the risk for the buyer and allowing the market to function smoothly.