About: Weitzman’s classic insight on the virtues of allocating a scarce good via the price system or through rationing is applied to the problem of distributing masks, when the use of a mask provides a positive external benefit. I show that if a market leaves some individuals without a mask (when potentially there is supply for all), then rationing may be the superior option. When the variation in need is small, then even if the external effect of mask wearing is approximately equal to the personal benefit, even 10–20% maskless in the population may justify rationing.   Goto Sponge  NotDistinct  Permalink

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  • Weitzman’s classic insight on the virtues of allocating a scarce good via the price system or through rationing is applied to the problem of distributing masks, when the use of a mask provides a positive external benefit. I show that if a market leaves some individuals without a mask (when potentially there is supply for all), then rationing may be the superior option. When the variation in need is small, then even if the external effect of mask wearing is approximately equal to the personal benefit, even 10–20% maskless in the population may justify rationing.
Subject
  • Numerical analysis
  • Public economics
  • Scarcity
  • Market failure
  • Welfare economics
  • Environmental economics
  • Economic systems
  • Marxism–Leninism
  • Equivalence (mathematics)
  • Approximations
  • Comparison (mathematical)
  • Economic history of Poland
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