A Social Welfare Economics Proposal Through Bargaining Theory: a Win-Win-Win Papakonstantinidis Model Approach Inserting Overall Arbitrator Player to the Local Development Game

In this study, we investigate the impact of Social Bargain on Welfare Problem adopting the win-win-win Papakonstantinidis model inserting the Overall Arbitrator Player into the local development game. This deals with (a) the failure of Public Choice in the production of social welfare, (b) the Bargaining Process as a proposal for generating social capital in the field of Welfare Economics. The purpose of this research is to indicate that Public Choice fails to lead to Economic Development. Instead, this can be achieved by implementing Social Bargaining Process into the game of social welfare. In particular, the gap between development and underdevelopment (regional problem) in the community is being investigated, while it is identified as being real and unresolved in the literature of Social Choice Theory and Regional Science. This gap can be corrected cured through Social Bargaining Process as a solution to the Welfare Problem. The above is being interpreted as follows: the agents of the game or voters of the community can make such collective decisions that eliminate regional disparities by choosing strategies or politicians that will make the appropriate assessments/choices for the community. The key questions are: a) why Public Choice fails to solve the problem of regional disparities and to lead to social welfare, (b) what makes the Social Bargaining Process the appropriate solution to the social welfare problem (or regional problem) and above it should be dealt with. As a methodology is being proposed the Mediation Theory model among two other processes: (1) The Principal-Agent process, considering Principals position as strong, and (2) the Leadership of a community and a single Member of the same community (Leader-Member Exchange LMX), considering the Leaders position as strong. The research findings proposed the creation of a social player in the bargaining process, where introduces the generation of social capital, that leads to social welfare to which Public Choice fails to lead and this point is also the originality of the paper.