Markets, Arbitrage and Social Choice
The paper establishes a clear connection between equilibrium theory and social choice theory by showing that, for a well defined social choice problem, the conditions which are necessary and sufficient to solve this problem are the same as the conditions which are necessary and sufficient to establish existence of a competitive equilibrium. We define a condition of limited arbitrage on the preferences and the endowments of an Arrow-Debreu economy. This bounds the utility gains that the traders can afford from their initial endowments. Theorem 2 proves that limited arbitrage is necessary and sufficient for the existence of a sodal choice rule which allocates society's resources among individuals in a manner which depends continuously and anonymously on their preferences over allocations, and which respects unanimity. Limited arbitrage is also necessary and sufficient for the existence of a competitive equilibrium in the Arrow - Debreu economy, with or without bounds on short sales, Theorem 7. Theorem 4 proves that any market allocation can be achieved as a social choice allocation, i.e. an allocation which is maximal among all feasible allocations according to a social preference defined via a social choice rule which is continuous, anonymous and respects unanimity.
(This abstract was borrowed from another version of this item.)
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
|Date of creation:||1992|
|Date of revision:|
|Contact details of provider:|| Postal: U.S.A.; COLUMBIA UNIVERSITY, GRADUATE SCHOOL OF BUSINESS, PAINE WEBBER , New York, NY 10027 U.S.A|
Phone: (212) 854-5553
Web page: http://www.gsb.columbia.edu/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:fth:colubu:93-12. 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: (Thomas Krichel)
If references are entirely missing, you can add them using this form.