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General equilibrium and social choice with increasing returns

Author

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  • Chichilnisky, Graciela

Abstract

For any intransitive community preference, we construct a non-convex economy where all the marginal cost pricing general equilibria are Pareto inefficient (theorem 3.2). The result is valid without requiring a fixed income distribution rule (corollary 3.3). Intransitive community preferences are a frequent occurrence (theorem 3.1): necessary and sufficient conditions for transitivity of the community preference fail in a set which is open and dense in the space of individual preferences with a standard topology.

Suggested Citation

  • Chichilnisky, Graciela, 1990. "General equilibrium and social choice with increasing returns," MPRA Paper 8124, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:8124
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    File URL: https://mpra.ub.uni-muenchen.de/8124/1/MPRA_paper_8124.pdf
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    References listed on IDEAS

    as
    1. Brown, Donald J. & Heal, Geoffrey M. & Ali Khan, M. & Vohra, Rajiv, 1986. "On a general existence theorem for marginal cost pricing equilibria," Journal of Economic Theory, Elsevier, vol. 38(2), pages 371-379, April.
    2. Debreu, Gerard, 1972. "Smooth Preferences," Econometrica, Econometric Society, vol. 40(4), pages 603-615, July.
    3. Chipman, John S., 1974. "Homothetic preferences and aggregation," Journal of Economic Theory, Elsevier, vol. 8(1), pages 26-38, May.
    4. Chichilnisky, Graciela, 1986. "Topological complexity of manifolds of preferences," MPRA Paper 8119, University Library of Munich, Germany.
    5. Chichilnisky, Graciela & Heal, Geoffrey, 1983. "Community preferences and social choice," Journal of Mathematical Economics, Elsevier, vol. 12(1), pages 33-61, September.
    6. Chichilnisky, Graciela, 1980. "Social choice and the topology of spaces of preferences," MPRA Paper 8006, University Library of Munich, Germany.
    7. Donald J. Brown & Geoffrey Heal, 1979. "Equity, Efficiency and Increasing Returns," Review of Economic Studies, Oxford University Press, vol. 46(4), pages 571-585.
    8. Guesnerie, Roger, 1975. "Pareto Optimality in Non-Convex Economies," Econometrica, Econometric Society, vol. 43(1), pages 1-29, January.
    9. Brown, Donald J & Heal, Geoffrey M, 1983. "Marginal vs. Average Cost Pricing in the Presence of a Public Monopoly," American Economic Review, American Economic Association, vol. 73(2), pages 189-193, May.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Graciela Chichilnisky, 1990. "On The Mathematical Foundations Of Political Economy," Contributions to Political Economy, Oxford University Press, vol. 9(1), pages 25-41.
    2. Chichilnisky, Graciela, 1990. "Social choice and the closed convergence topology," MPRA Paper 8353, University Library of Munich, Germany.
    3. Chichilnisky, Graciela, 1993. "Topoloy and economics: the contributions of S. Smale," MPRA Paper 8485, University Library of Munich, Germany.

    More about this item

    Keywords

    general equilibrium; pareto efficient; pareto inefficient; community preference; income distribution; topology; transitivity; market efficiency;

    JEL classification:

    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis

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