Zaman, Md Monowaruz (2008): Welfare dynamics based on a new concept of inefficient equilibrium.
This is the latest version of this item.
Download (232kB) | Preview
This article has developed a new model of welfare dynamics under imperfect information or imperfect competition by introducing a new concept of “inefficient equilibrium”. If a country suffers from poverty, then the population of the country can be divided into two groups. For one group the fundamental welfare theorems are valid and for the other group the welfare is yet to achieve. The first group establishes an inefficient equilibrium with the second group. The institutions of an economy play very important role when these two groups interact with each other. This concept narrowly defines where government should work. This model is enhanced to describe a new ‘Market Model of Welfare Dynamics’ that our market is not uniform but distributed in layers of energy states. The probability of achieving Pareto efficiency decreases down along the market energy states. At the end, another new concept ‘Market Loop’ is defined to shed light on recent financial crisis and recession.
|Item Type:||MPRA Paper|
|Original Title:||Welfare dynamics based on a new concept of inefficient equilibrium|
|English Title:||Welfare dynamics based on a new concept of inefficient equilibrium|
|Keywords:||Financial crisis, market loop, market model, Pareto efficiency, Pareto improvement, information, principal-agent problem, welfare, poverty, bottom-up economics, information asymmetry, market energy, welfare dynamics|
|Subjects:||O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O11 - Macroeconomic Analyses of Economic Development
I - Health, Education, and Welfare > I3 - Welfare, Well-Being, and Poverty > I31 - General Welfare, Well-Being
D - Microeconomics > D6 - Welfare Economics > D61 - Allocative Efficiency ; Cost-Benefit Analysis
D - Microeconomics > D5 - General Equilibrium and Disequilibrium > D52 - Incomplete Markets
D - Microeconomics > D6 - Welfare Economics > D60 - General
D - Microeconomics > D4 - Market Structure, Pricing, and Design > D49 - Other
|Depositing User:||MD MONOWARUZ ZAMAN|
|Date Deposited:||29. Nov 2008 04:35|
|Last Modified:||07. Jan 2016 16:35|
Arrow, Kenneth (1964). ‘The Role of Securities in the Optimal Allocation of Risk Bearing’, Review of Economic Studies, XXXI, p-91-96.
Debreu, G. (1959), The Theory of Value, John Wiley and Sons, New York.
Fundenberg, D. and Tirole, J.(1996). Game Theory, Cambridge, MA: M.I.T. Press.
Hodgson, Geoffrey M. (2006). ‘What Are Institutions’, Journal of Economic Issues, XL, p-1-24.
Hodgson, Geoffrey M. (2007). ‘Meaning of Methodological Individualism’, Journal of Economic Methodology, 14:2, p-211-226.
Krugman, Paul (1992). ‘A Dynamic Spatial Model’, National Bureau of Economic Research, Working Paper No.4219, Cambridge, MA.
Murphy, Austin (2008). ‘An Analysis of the Financial Crisis of 2008: Causes and Solutions’, Social Science Research Network. (http://ssrn.com/abstract=1295344).
Nash, John, (1950). ‘Equilibrium points in n-person games’, Proceedings of the National Academy of the USA 36(1):48–49
Nash, John, (1951). ‘Non-cooperative games’, PAnnals of Mathematics 54:286-295
NewScientist (2008). ‘Blinded by Science’, Spetember 27, 2008.
Ng, Yew-Kwang (1984). ‘Quasi-Pareto Social Improvements’, American Economic Review 74:1033-1050.
North, Douglass C., (1990a). Institutions, Institutional Change, and Economic Performance, New York: Cambridge University Press.
North, Douglass C., (1990b). ‘A Transactions Cost Theory of Politics’, Journal of Theoretical Politics 2 (4): 355-67
North, Douglass C., (1994). ‘Economic Performance through Time’, American Economic Review, Vol.84, No.3, pp-359-368
Quadir, Iqbal (2003). ‘Bottom-up Economics’, Harvard Business Review, Issue August 2003.
Prahalad, C.K. and Hart,Stuart L. (2002) 'The Fortune at the Bottom of the Pyramid', Strategy + Business, Issue 26.
Ross, S. (1973). ‘The Economic Theory of Agency: The Principal’s Problem’, American Economic Review, LXIII, p-134-139.
Rotering, Frank (2006). ‘Economics of Needs and Limits, (http://members.shaw.ca/needsandlimits/Overview.html)
Sen, Amartya. K., 1988, Freedom of choice: concept and content, European Economic Review, 32, 269-294.
Sen, Amartya. K., 1993, Markets and Freedom, Oxford Economic Papers, 45, 519-541.
Sen, Amartya. K., 2000, Freedom, Rationality, and Social Choice, Clarendon Press, Oxford.
Simon, Herbert A. (1982). Models of Bounded Rationality. Cambridge, MA: MIT Press.
Simon, Herbert. (1986). ‘Rationality in Psychology and Economics’, Rational choice: The contrast between economics and psychology, University of Chicago Press, pp. 25-40.
Stigler, George J. (1967), ‘Imperfections in the Capital Market’, Journal of Political Economy, LXXV, p-213–225.
Stiglitz, Joseph E. (2000). ‘The Contributions of the Economics of Information to Twentieth Century Economics’, The Quarterly Journal of Economics, November 2000, p-1441-1478.
Stiglitz, Joseph E. (1991). ‘The Invisible Hand and Modern Welfare Economics’, National Bureau of Economic Research, Massachusetts, Cambridge, Working Paper No-3641.
Stiglitz, Joseph E. (1987). ‘The Causes and Consequences of the Dependence of Quality on Prices’, Journal of Economic Literature, XXV, p-1-48.
Tadenuma K. & Xu Yongsheng (2002). ‘The Fundamental Theorems of Welfare Economics in a Non-Welfaristic Approach’, Discussion Paper ,Hitotsubashi University Tokyo 2002
Weintraub, E.R. (1985). General Equilibrium Analysis: Studies in Appraisal, Historical Perspectives on Modern Economics, Cambridge University Press.
Yunus, Mohammad (2006). ‘The Nobel Peace Prize Laureate 2006’, Oslo. The fipbel Foundation. Stockholm, Sweden.
Zaman, Monowaruz (2001). ‘Greenhouse Care-a Proposal of a New Economic Development Model for the Poorest People of an Economy’, Journal of Business Administration, Volume 27, No3&4.
Zaman, Monowaruz (2006). ‘Cycle Of Economics: A new model Of economics based on Information, Rationality Pattern and Income Distribution’, MPRA. (http://mpra.ub.uni-muenchen.de/614/)
Zaman, Monowaruz (2008). ‘An Introduction to Economics of Information Biasing’, Social Science Research Network. (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1146323)
Available Versions of this Item
Welfare dynamics based on a new concept of inefficient equilibrium. (deposited 30. Oct 2008 09:22)
- Welfare dynamics based on a new concept of inefficient equilibrium. (deposited 29. Nov 2008 04:35) [Currently Displayed]