Talk:Deadweight loss

I doubt I completely understand this but a dead weight loss sounds like gouging. Why not use the Tickle-me elmo xmas example. At least thats how I think the nail example relates. At any rate I don't think nails is a good example and we should look for a historical one. —Preceding unsigned comment added by 72.148.115.85 (talk) 10:39, 19 December 2007 (UTC)

"Price gouging" is a normative term generally used by consumers in the face of highly inelastic short-run supply to describe seemingly "unfair" changes in market price caused by outward shifts of demand. Deadweight loss in a market represents the existence of a Pareto improvement, implying that said market outcome or equilibrium is not Pareto efficient. Absent market failures, this cannot logically occur. Please don't put anything about tickle-me Elmo on this otherwise decent page. Instead, consider this: When Tickle-me Elmo had a fixed supply during the christmas rush, the units were allocated to those people who valued them the highest. No person whose marginal benefit was higher than the Elmo's marginal cost was denied a unit, and no person whose marginal benefit was lower than the Elmo's marginal cost purchased one. There were no market failures, only high demand and nearly fixed supply. Thus, no deadweight loss. Bsdlite (talk) 19:46, 17 February 2008 (UTC)

Harberger's Triangle

I just wanted to note that the link at the bottom of the page merely references this page. I was interested in what Harberger's Triangle was since it wasn't mentioned in this article. 165.206.43.5 (talk)

Merger proposal

Deadweight loss and excess burden of taxation are synonyms closely related. I propose that we merge them. --Explodicle (talk) 16:36, 18 March 2008 (UTC)

While I disagree that they're synonyms (because (non-pigouvian) taxation creates dwl, but not all dwl is caused by taxation), I agree that maybe the ideas from the excess burden of taxation page might be more useful on this article. Bsdlite (talk) 21:31, 31 March 2008 (UTC)

You're right. I've changed my original statement. --Explodicle (talk) 15:17, 1 April 2008 (UTC)

I think the two topics are totally different regarding "dead weight loss" and the more specific topic of "excess burden of taxation." It would be like claiming that the article on here for hydrogen and the on here for oxygen should be merged into the water article or something. —Preceding unsigned comment added by 24.107.177.212 (talk) 02:42, 13 August 2008 (UTC)

All someone needs to do to make this a whole lot simpler is make a graph for the nail example with labled axis, showing the equlibrium is 10 cents and the new monopoly price e.t.c...

Deletion Proposal

Actually, I would move for deletion of the article as an idiosyncratic theory, not of encyclopedic interest. Pustelnik (talk) 18:13, 29 June 2008 (UTC)

Deadweight loss is a very common notion in economics, not idiosyncratic at all. Cretog8 (talk) 01:27, 30 June 2008 (UTC)

Delete over my dead body! After having a 45 minute argument with my economics student friend about this very topic, only to reach a agreement some days later (him after consulting his tutor, me this article) I think it would not benefit Wikipedia as a whole by removing it, unless we suddenly aren't supposed to be making entires on economics. Hayaku (talk) 12:06, 6 February 2009 (UTC)

Idiosyncratic? I'm taking Economics 101 in college and we covered deadweight loss in the third or fourth class. I'm going to go ahead and agree with Cretog8. --Nurax (talk) 16:52, 11 February 2009 (UTC)

Regulation

Market regulations are also a source of deadweight loss —Preceding unsigned comment added by 164.41.42.15 (talk) 22:12, 5 January 2009 (UTC)

Case with perfectly elastic Demand

"Marshallian deadweight loss is zero where demand is perfectly elastic" [or supply inelastic] I dispute the [where demand is perfectly elastic] bit of this statement. The loss of consumer surplus is zero in this case, but surely the deadweight loss also includes the loss of the producer surplus, which is not zer. See the first graph in http://en.wikipedia.org/wiki/Tax_incidence . Or have I missed something?? —Preceding unsigned comment added by 128.232.253.211 (talk) 14:26, 30 March 2010 (UTC)

I think you're right. The deadweight loss would be zero when either demand or supply is perfectly inelastic. The third graph in the page you mentioned is what happens when demand is inelastic. The white triangle of deadweight loss is small, and if the demand were completely inelastic (i.e. a vertical line,) it would be nonexistent. There's still a big loss in consumer surplus, but all of it is collected in tax revenue, so it doesn't count as deadweight loss 168.16.132.59 (talk) 21:50, 3 May 2010 (UTC)

Proposal for new section: dwl with respect to elasticity of demand

Deadweight loss due to taxation is heavily dependent on the elasticity of demand. For example the dwl from a $10 tax on oil is radically different from the dwl from a $10 tax on passion fruit. Would a section describing this effect be a welcomed addition? Justintbassett (talk) 16:20, 5 May 2011 (UTC)