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Hurwicz y el juez de última instancia

Author

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  • Jorge Iván González

    () (Universidad Nacional de Colombia)

Abstract

When receiving the Nobel Prize, Hurwicz took up the question “who is watching the guards?” and considered two approaches. One pessimistic, inspired by Juvenal, which leads to an infinite sequence of guards, and one idealistic, derived from the Platonic dialogues. The guard cannot get drunk, and if he does, he should resign. Although this closure of first instance does not happen in the real world, neither does Juvenal’s pessimism make sense. Society always finds a reasonable closure instance, but this solution is suboptimal and is plagued with impurities and illegalities. The leading strategy may be part of a set of illegal alternatives. Implementation is successful if the equilibrium corresponds to the legislator’s purposes. Every implementation can be improved and it is never entirely successful. Implementation mechanisms determine how the social welfare function is reached, which affects at the same time the private property prices and the consumption structure, so the market configuration depends on the kind of implementation and how the close of the last instance is made.

Suggested Citation

  • Jorge Iván González, 2008. "Hurwicz y el juez de última instancia," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 10(19), pages 115-129, July-Dece.
  • Handle: RePEc:rei:ecoins:v:10:y:2008:i:19:p:115-129
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    File URL: http://www.uexternado.edu.co/facecono/ecoinstitucional/workingpapers/jgonzalez19.pdf
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    References listed on IDEAS

    as
    1. Robert J. Aumann, 2007. "War and Peace," Chapters,in: Augustin Cournot: Modelling Economics, chapter 5 Edward Elgar Publishing.
    2. Leonid Hurwicz, 2008. "But Who Will Guard the Guardians?," American Economic Review, American Economic Association, vol. 98(3), pages 577-585, June.
    3. Hurwicz, Leonid, 1973. "The Design of Mechanisms for Resource Allocation," American Economic Review, American Economic Association, vol. 63(2), pages 1-30, May.
    4. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
    5. Theodore W. Schultz, 1962. "Reflections on Investment in Man," Journal of Political Economy, University of Chicago Press, vol. 70, pages 1-1.
    6. Arrow, Kenneth J, 1986. "Rationality of Self and Others in an Economic System," The Journal of Business, University of Chicago Press, vol. 59(4), pages 385-399, October.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    social welfare function; human relations; suboptimal equilibrium;

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
    • D60 - Microeconomics - - Welfare Economics - - - General

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