Extensions of the Fundamental Welfare Theorems in a Non-welfaristic Framework
AbstractIn a non-welfaristic framework, Sen (1993) extends the first fundamental welfare theorem by demonstrating that the market mechanism also promotes individual freedom efficiently. This paper has a two-fold purpose. First, in order to investigate extensions of the first and the second welfare theorems, we present an analytical framework in which each agent is endowed with three types of preference relations: an allocation preference relation, an opportunity preference relation, and an overall preference relation. We demonstrate that under certain conditions, the two welfare theorems can be extended. Second, we describe the restrictive nature of the underlying conditions for these positive results.
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Bibliographic InfoArticle provided by Hitotsubashi University in its journal Hitotsubashi Journal of Economics.
Volume (Year): 53 (2012)
Issue (Month): 1 (June)
fundamental welfare theorems; market mechanism; freedom; opportunity set; Pareto optimality;
Find related papers by JEL classification:
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
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