IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

An Evolutionary Efficiency Alternative to the Notion of Pareto Efficiency

  • Irene van Staveren

The paper argues that the notion of Pareto efficiency builds on two normative assumptions: the more general consequentialist norm of any efficiency criterion, and the strong no-harm principle of the prohibition of any redistribution during the economic process that hurts at least one person. These normative concerns lead to a constrained and static notion of efficiency in mainstream economics, ignoring dynamic efficiency gains from more equal allocations of resources. The paper argues that a weak no-harm principle instead provides an endogenous efficiency criterion, which shifts attention away from equilibrium analysis in hypothetically perfect markets towards an evolutionary analysis of efficiency in real-world, non-equilibrium markets. Moreover, such an evolutionary notion of efficiency would be less normative than the Paretian concept.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://et.worldeconomicsassociation.org/papers/an-evolutionary-efficiency-alternative-to-the-notion-of-pareto-efficiency/
Download Restriction: no

File URL: http://et.worldeconomicsassociation.org/files/ETVanStaveren_1_1.pdf
Download Restriction: no

Article provided by World Economics Association in its journal Economic Thought.

Volume (Year): 1 (2012)
Issue (Month): 1 (July)
Pages: 7

as
in new window

Handle: RePEc:wea:econth:v:1:y:2012:i:1:p:7
Contact details of provider: Web page: http://www.worldeconomicsassociation.org/

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Charness, Gary & Rabin, Matthew, 2002. "Understanding Social Preferences with Simple Tests," Department of Economics, Working Paper Series qt3d04q5sm, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  2. Elizabeth Webster, 1999. "The Economics of Intangible Investment," Books, Edward Elgar, number 1530.
  3. Roland Benabou, 1996. "Inequality and Growth," NBER Working Papers 5658, National Bureau of Economic Research, Inc.
  4. Oriana Bandiera & Iwan Barankay & Imran Rasul, 2005. "Social Preferences and the Response to Incentives: Evidence from Personnel Data," The Quarterly Journal of Economics, MIT Press, vol. 120(3), pages 917-962, August.
  5. George A. Akerlof & Rachel E. Kranton, 2008. "Identity, Supervision, and Work Groups," American Economic Review, American Economic Association, vol. 98(2), pages 212-17, May.
  6. Charles F. Manski, 2000. "Economic Analysis of Social Interactions," NBER Working Papers 7580, National Bureau of Economic Research, Inc.
  7. Paul M Romer, 1999. "Increasing Returns and Long-Run Growth," Levine's Working Paper Archive 2232, David K. Levine.
  8. Dudley, Leonard, 1999. "Communications and economic growth," European Economic Review, Elsevier, vol. 43(3), pages 595-619, March.
  9. Aghion, Philippe & Caroli, Eve & Garcia-Penalosa, Cecilia, 1999. "Inequality and economic growth: the perspective of the new growth theories," CEPREMAP Working Papers (Couverture Orange) 9908, CEPREMAP.
  10. Vivian Walsh, 2003. "Sen after Putnam," Review of Political Economy, Taylor & Francis Journals, vol. 15(3), pages 315-394.
  11. Ingrid H. Rima, 2004. "Increasing returns, new growth theory, and the classicals," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 27(1), pages 171-184, October.
  12. Claudia Biancotti & Giovanni D'Alessio, 2008. "Values, inequality and happiness," Temi di discussione (Economic working papers) 669, Bank of Italy, Economic Research and International Relations Area.
  13. Samuel Bowles, 1998. "Endogenous Preferences: The Cultural Consequences of Markets and Other Economic Institutions," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 75-111, March.
  14. Dirk Engelmann & Martin Strobel, 2004. "Inequality Aversion, Efficiency, and Maximin Preferences in Simple Distribution Experiments," American Economic Review, American Economic Association, vol. 94(4), pages 857-869, September.
  15. Roland Benabou & Jean Tirole, 2005. "Belief in a Just World and Redistributive Politics," NBER Working Papers 11208, National Bureau of Economic Research, Inc.
  16. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
  17. Banerjee, Abhijit V & Duflo, Esther, 2003. " Inequality and Growth: What Can the Data Say?," Journal of Economic Growth, Springer, vol. 8(3), pages 267-99, September.
  18. Ernst Fehr & Simon Gaechter, 2000. "Fairness and Retaliation: The Economics of Reciprocity," CESifo Working Paper Series 336, CESifo Group Munich.
  19. Walsh, Vivian, 1996. "Rationality, Allocation, and Reproduction," OUP Catalogue, Oxford University Press, number 9780198287728, March.
  20. Dave Colander & Peter Howitt & Alan Kirman & Axel Leijonhufvud & Perry Mehrling, 2008. "Beyond DSGE Models: Toward an Empirically Based Macroeconomics," Middlebury College Working Paper Series 0808, Middlebury College, Department of Economics.
  21. Taslim, M A, 1989. "Supervision Problems and the Size-Productivity Relation in Bangladesh Agriculture," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 51(1), pages 55-71, February.
  22. Sen, Abhijit, 1981. "Market Failure and Control of Labour Power: Towards an Explanation of 'Structure' and Change in Indian Agriculture: Part 1," Cambridge Journal of Economics, Oxford University Press, vol. 5(3), pages 201-28, September.
  23. Sen, Abhijit, 1981. "Market Failure and Control of Labour Power: Towards an Explanation of 'Structure' and Change in Indian Agriculture. Part 2," Cambridge Journal of Economics, Oxford University Press, vol. 5(4), pages 327-50, December.
  24. Samuel Bowles & Herbert Gintis, 2000. "Walrasian Economics In Retrospect," The Quarterly Journal of Economics, MIT Press, vol. 115(4), pages 1411-1439, November.
  25. Daniel Kahneman, 2003. "Maps of Bounded Rationality: Psychology for Behavioral Economics," American Economic Review, American Economic Association, vol. 93(5), pages 1449-1475, December.
  26. Acemoglu, Daron, 1996. "A Microfoundation for Social Increasing Returns in Human Capital Accumulation," The Quarterly Journal of Economics, MIT Press, vol. 111(3), pages 779-804, August.
  27. Mark Blaug, 2001. "Is Competition Such a Good Thing? Static Efficiency versus Dynamic Efficiency," Review of Industrial Organization, Springer, vol. 19(1), pages 37-48, August.
  28. Vivian Walsh, 2000. "Smith After Sen," Review of Political Economy, Taylor & Francis Journals, vol. 12(1), pages 5-25.
  29. Dirk Engelmann & Martin Strobel, 2006. "Inequality Aversion, Efficiency, and Maximin Preferences in Simple Distribution Experiments: Reply," American Economic Review, American Economic Association, vol. 96(5), pages 1918-1923, December.
  30. White, Mark D., 2004. "Can homo economicus follow Kant's categorical imperative?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 33(1), pages 89-106, March.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:wea:econth:v:1:y:2012:i:1:p:7. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jake McMurchie)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.