Fundamental Welfare Theorems

2006 ◽  
pp. 191-225 ◽  
Keyword(s):  
Welfare Theorems

Sharing Risk Efficiently under Suboptimal Punishments for Defection

2010 ◽  
Vol 10 (1) ◽  
Author(s):  
Drew Saunders
Keyword(s):  
Risk Sharing ◽  
Technical Condition ◽  
Price System ◽  
Individual Rationality ◽  
Welfare Theorems ◽  
Resource Exhaustion ◽  
Efficient Allocations

I study efficient risk-sharing in an endowments economy when enforcement is achieved by the threat of reversion to punishments that may be less severe than autarkic consumption. I characterize (up to a technical condition) the set of allocations that may be interpreted as efficient with respect to some punishment convention. The conditions rationalizing such efficiency are very weak; they are (i) resource exhaustion, (ii) satisfaction of individual rationality constraints at each continuation, and (iii) finiteness of the value of the allocation under the implicit decentralizing price system. I show how efficient allocations may be decentralized, and I state versions of the Welfare Theorems for these economies.

scholarly journals Financial intermediation and the welfare theorems in incomplete markets

2020 ◽  
Author(s):  
Marc Oliver Bettzüge ◽  
Thorsten Hens ◽  
Michael Zierhut
Keyword(s):  
Incomplete Markets ◽  
Financial Intermediation ◽  
Welfare Theorems

scholarly journals Welfare theorems for random assignments with priorities

2020 ◽  
Vol 124 ◽  
pp. 62-81
Author(s):  
Jan Christoph Schlegel ◽  
Akaki Mamageishvili
Keyword(s):  
Welfare Theorems

scholarly journals A Sparsity-Based Model of Bounded Rationality *

2014 ◽  
Vol 129 (4) ◽  
pp. 1661-1710 ◽  
Author(s):  
Xavier Gabaix
Keyword(s):  
Phillips Curve ◽  
Competitive Equilibrium ◽  
Limited Attention ◽  
One Dimensional ◽  
First Order ◽  
The World ◽  
Welfare Theorems ◽  
Competitive Equilibria ◽  
Rational Version ◽  
Offer Curve

AbstractThis article defines and analyzes a “sparse max” operator, which is a less than fully attentive and rational version of the traditional max operator. The agent builds (as economists do) a simplified model of the world which is sparse, considering only the variables of first-order importance. His stylized model and his resulting choices both derive from constrained optimization. Still, the sparse max remains tractable to compute. Moreover, the induced outcomes reflect basic psychological forces governing limited attention. The sparse max yields a behavioral version of basic chapters of the microeconomics textbook: consumer demand and competitive equilibrium. I obtain a behavioral version of Marshallian and Hicksian demand, Arrow-Debreu competitive equilibrium, the Slutsky matrix, the Edgeworth box, Roy’s identity, and so on. The Slutsky matrix is no longer symmetric: nonsalient prices are associated with anomalously small demand elasticities. Because the consumer exhibits nominal illusion, in the Edgeworth box, the offer curve is a two-dimensional surface rather than a one-dimensional curve. As a result, different aggregate price levels correspond to materially distinct competitive equilibria, in a similar spirit to a Phillips curve. The Arrow-Debreu welfare theorems typically do not hold. This framework provides a way to assess which parts of basic microeconomics are robust, and which are not, to the assumption of perfect maximization.

Generalized Samuelson conditions and welfare theorems for nonsmooth economies

1996 ◽  
Vol 59 (1) ◽  
pp. 137-152 ◽  
Author(s):  
John P. Conley ◽  
Dimitrios Diamantaras
Keyword(s):  
Welfare Theorems

scholarly journals Non-redistributive Second Welfare Theorems

2012 ◽  
pp. 227-243 ◽  
Author(s):  
Bundit Laekhanukit ◽  
Guyslain Naves ◽  
Adrian Vetta
Keyword(s):  
Welfare Theorems

scholarly journals Can Neoclassical Economics Underpin the Reform of Centrally Planned Economies?

1991 ◽  
Vol 5 (4) ◽  
pp. 59-76 ◽  
Author(s):  
Peter Murrell
Keyword(s):  
Neoclassical Economics ◽  
Economic Systems ◽  
Neoclassical Model ◽  
Satisfactory Explanation ◽  
Market Economies ◽  
Essential Condition ◽  
Socialist Economic ◽  
Efficient Resource ◽  
Welfare Theorems ◽  
Standard Models

This paper addresses whether neoclassical economics can provide the intellectual underpinning for a theory of reform. I examine whether the neoclassical model satisfies an essential condition to qualify for this role: does it give us a satisfactory explanation for the vast differences in performance between capitalist and socialist economic systems? First, I focus on the theoretical arguments that have traditionally been used to examine the comparative properties of central planning and markets. I show that developments within theory over the last 20 years have substantially changed the tone of these arguments, making their message more equivocal. Next I discuss empirical evidence, but of a particular sort. Much research shows that centrally planned economies perform less well than market economies; but few studies test whether the superiority of market economies appears within empirical models derived using the framework of basic neoclassical economics. Those studies are the relevant ones for the present exercise. The central conclusion is that economists must look outside the standard models of competition, the focus on Pareto-efficient resource allocation, and the welfare theorems to build a theory of reform.

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