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Tuesday, September 28, 2010

Break rooms

I would like to examine what exactly happens in the employee break rooms? In dealing with the employee break rooms you are faced with externality issues, marginal cost, total cost. Marginal cost is the polluter of the break rooms. External cost will continue to increase due to the amount of pollution in the break room. As the employees use the break rooms there will be one person cleaning will have more of an incentive to clean so they will end up cleaning more. Since the one person keeps cleaning the marginal cost of people who do not clean will go down. The pollution will keep increasing. The model in class that was used was marginal cost and marginal external coast equal optimal levels of pollution, at the intersection of MC and MEC. Implementing rules to fix the pollution in the break room could help. Posting a sing stating EVEYONE USES BREAK ROOM, CLEANS BREAK ROOM MUST CLEAN UP AFTER THEMSELVES by specifying all users will help. This will help you reach you optimal level of pollution in the break room. This will help people take into account total coast of their decisions. The externalities are because of the people who do not clean up after themselves. And in conclusion we are trying to meet total optimal level of pollution.

You solution suggests the issue is not an externality. There are costs to others as you discuss but these costs are internal to a business or organization. Since it is within an organization, the decision makers that determine the action taken by the business/organization have the ability to react to costly behavior within the organization and make efforts to change it. No externality because the relationships are internal to a business/organization.
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