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Radner’s cost–benefit analysis in the small: A correction and new equivalences

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  • Schlee, Edward E.

Abstract

Schlee (2013) asserts the equivalence between a local welfare measure proposed by Radner (1993) and the derivatives of six other welfare measures. The asserted equivalence between Radner’s measure and one of these – Debreu’s (1951) coefficient of resource utilization – is false. What is the case is that the other six local welfare measures are equivalent to a modification of Debreu’s coefficient that applies to economies with distortions.

Suggested Citation

  • Schlee, Edward E., 2018. "Radner’s cost–benefit analysis in the small: A correction and new equivalences," Economics Letters, Elsevier, vol. 172(C), pages 31-33.
    • Handle: RePEc:eee:ecolet:v:172:y:2018:i:c:p:31-33
    DOI: 10.1016/j.econlet.2018.07.035
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    References listed on IDEAS

    as
    1. Schlee, Edward E., 2013. "Radner’s cost–benefit analysis in the small: An equivalence result," Economics Letters, Elsevier, vol. 120(3), pages 570-572.
    2. Luenberger, David G., 1992. "Benefit functions and duality," Journal of Mathematical Economics, Elsevier, vol. 21(5), pages 461-481.
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    More about this item

    Keywords

    Local cost–benefit analysis; Benefit function; Coefficient of resource utilization;
    All these keywords.

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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