General equilibrium and social choice with increasing returns

Chichilnisky, Graciela (1990): General equilibrium and social choice with increasing returns. Published in: Annals of Operations Research , Vol. 23, (1990): pp. 289-297.

Abstract

For any intransitive community preference, we construct a non-convex economy where all the marginal cost pricing general equilibria are Pareto inefficient (theorem 3.2). The result is valid without requiring a fixed income distribution rule (corollary 3.3). Intransitive community preferences are a frequent occurrence (theorem 3.1): necessary and sufficient conditions for transitivity of the community preference fail in a set which is open and dense in the space of individual preferences with a standard topology.

• Item Type: MPRA Paper
• Language: English
• Keywords: general equilibrium; pareto efficient; pareto inefficient; community preference; income distribution; topology; transitivity; market efficiency
• Subjects: D - Microeconomics > D7 - Analysis of Collective Decision-Making > D71 - Social Choice ; Clubs ; Committees ; Associations; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E24 - Employment ; Unemployment ; Wages ; Intergenerational Income Distribution ; Aggregate Human Capital ; Aggregate Labor Productivity; D - Microeconomics > D6 - Welfare Economics > D61 - Allocative Efficiency ; Cost-Benefit Analysis

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