This module explores the idea of self-regulating systems through connecting examples from economics and ecology. In particular, the questions of environmental pollution and regulation will be explored, comparing the self-regulating mechanisms of various markets and ecosystems. In each case the focus will be on the conditions of achieving a steady state or equilibrium position, and on various examples in which the mechanisms that normally bring this about fail. From the economics point of view this involves understanding the role of supply and demand in the market, the price mechanism, and the various cases of this mechanism being distorted by imperfect information, missing markets, high transaction costs, or limited rationality. These are all going to be used to explore the questions of pollution and environmental regulation to see how man-made self-regulating systems interact with natural ones. The key question throughout the course will be the continuous evaluation of external interventions – such as pollution or market regulation –by contrasting both their favourable and unfavourable consequences.
Module Leader:Árpád Földessy