Externality Solutions Simulator

Exploring Coase Bargaining and Pigouvian Policies

Choose a Scenario

Market Quantity
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Efficient Quantity
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Deadweight Loss
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External Cost
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Scenario Data Summary
Metric Value Notes
Scenario——
Market Quantity (Qm)—Where PMB = PMC
Efficient Quantity (Q*)—Where SMB = SMC
Deadweight Loss—Welfare loss from externality
External Cost (total)—At market quantity
Optimal Policy Level—Pigouvian tax/subsidy
Coase: Gains from Bargaining—= Deadweight Loss eliminated
Transaction Costs$50Set with slider
Bargaining Outcome—