Egbert Dierker (University of Vienna) Hildegard Dierker (University of Vienna) Birgit Grodal (Institute of Economics, University of Copenhagen)
Abstract
We consider economies with incomplete markets, one good per state, two periods, t = 0; 1, private ownership of initial endowments, a single firm, and no assets other than shares in this firm. In Dierker, Dierker, Grodal (2002), we give an example of such an economy in which all market equilibria are constrained ineffcient. In this paper, we weaken the concept of constrained effciency by taking away the planner’s right to determine consumers’ investments. An allocation is called minimally constrained efficient if a planner, who can only determine the production plan and the distribution of consumption at t = 0, cannot find a Pareto improvement. We present an example with arbitrarily small income effects in which no market equilibrium is minimally constrained effcient.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by University of Copenhagen. Department of Economics in its series Discussion Papers with number
03-09.
Length: 13 pages Date of creation: Nov 2002 Date of revision: Handle: RePEc:kud:kuiedp:0309
Contact details of provider: Postal: Øster Farimagsgade 5, Building 26, DK-1353 Copenhagen K., Denmark Phone: (+45) 35 32 26 26 Fax: +45 35 32 30 00 Web page: http://www.econ.ku.dk More information through EDIRC
Order Information: Email:
For technical questions regarding this item, or to correct its listing, contact: (Henriette Aabo Hansen).
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
DHILLONÊ, Amrita & MERTENSÊ, Jean-Franois, 1993.
"Relative Utilitarianism,"
CORE Discussion Papers
1993048, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)