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Negative externalities and Sen’s liberalism theorem


  • Donald Saari


  • Anne Petron



Sen’s seminal, negative theorem about minimal liberalism has had a profound effect on economics, philosophy, and the social sciences. To address concerns raised by his result, we show how Sen’s assumptions must be modified to obtain positive conclusions; e.g., one resolution allows an agent to be decisive only if his choice does not impose “strong negative externalities” on others. We also uncover a significantly different interpretation of Sen’s societal cycles: rather than describing the rights of individuals to choose, the cycles identify when these choices impose difficulties on others. Other ways to address Sen’s difficulties come from game theory. Copyright Springer-Verlag Berlin/Heidelberg 2006

Suggested Citation

  • Donald Saari & Anne Petron, 2006. "Negative externalities and Sen’s liberalism theorem," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 28(2), pages 265-281, June.
  • Handle: RePEc:spr:joecth:v:28:y:2006:i:2:p:265-281
    DOI: 10.1007/s00199-005-0622-9

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    Cited by:

    1. Shmuel Nitzan, 2010. "Demystifying the ‘metric approach to social compromise with the unanimity criterion’," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 35(1), pages 25-28, June.
    2. Herrade Igersheim, 2013. "Invoking a Cartesian product structure on social states," Theory and Decision, Springer, vol. 74(4), pages 463-477, April.
    3. Piggins, Ashley & Salerno, Gillian, 2016. "Sen cycles and externalities," Economics Letters, Elsevier, vol. 149(C), pages 25-27.
    4. Lingfang (Ivy) Li & Donald Saari, 2008. "Sen’s theorem: geometric proof, new interpretations," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 31(3), pages 393-413, October.


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