Welfare dynamics based on a new concept of inefficient equilibrium
AbstractThis article has developed a new model of welfare dynamics under imperfect information or imperfect competition by introducing a new concept of ‘inefficient welfare equilibrium’. It assumes that an economy can be split into two virtual parts. For one part the fundamental welfare theorems are valid and for the other part welfare is yet to achieve. This model is enhanced to describe market dynamics where market is not uniform but distributed in layers of energy states. The probability of achieving Pareto efficiency decreases down along the market energy states.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 11303.
Date of creation: 18 Aug 2008
Date of revision:
Pareto efficiency; Pareto improvement; information; principal-agent problem; welfare; poverty; bottom-up economics; information asymmetry; market energy; welfare dynamics;
Find related papers by JEL classification:
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
- D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
- D52 - Microeconomics - - General Equilibrium and Disequilibrium - - - Incomplete Markets
- D60 - Microeconomics - - Welfare Economics - - - General
- D49 - Microeconomics - - Market Structure and Pricing - - - Other
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-11-04 (All new papers)
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