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Existence of a Pareto optimal social interaction outcome with non-binary preferences

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  • Berdellima, Arian
  • Naqvi, Nadeem

Abstract

We prove the existence of a Pareto optimal state of a society with non-binary personal preferences. To our knowledge, this is the weakest set of conditions under which the existence of a Pareto optimal state has been proven. In our theory everybody in society engages in maximization as a personal act of volitional choice based on non-binary preferences, as in Sen (1997). The resultant equilibrium belongs to a unanimity-based nonempty social maximal set. Our generalization exposes the fact that such equilibria support discrimination, which is a surprising, though serious, indictment of relying exclusively on the Pareto principle in social evaluation.

Suggested Citation

  • Berdellima, Arian & Naqvi, Nadeem, 2011. "Existence of a Pareto optimal social interaction outcome with non-binary preferences," MPRA Paper 28168, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:28168
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    References listed on IDEAS

    as
    1. Naqvi, Nadeem, 2010. "On Non-binary Personal Preferences in Society, Economic Theory and Racial Discrimination," MPRA Paper 21522, University Library of Munich, Germany.
    2. Kenneth J. Arrow, 1998. "What Has Economics to Say about Racial Discrimination?," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 91-100, Spring.
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    Cited by:

    1. Naqvi, Nadeem, 2012. "Why is the Workplace Racially Segregated by Occupation?," MPRA Paper 43352, University Library of Munich, Germany.
    2. Naqvi, Nadeem, 2012. "Impossibility of interpersonal social identity diversification under binary preferences," MPRA Paper 41365, University Library of Munich, Germany.

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    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D60 - Microeconomics - - Welfare Economics - - - General

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