Competitive Market Mechanisms as Social Choice Procedures

Peter Hammond

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

Abstract: A competitive market mechanism is a prominent example of a non-binary social choice rule, typically defined for a special class of economic environments in which each social state is an economic allocation of private goods, and individuals' preferences concern only their own personal consumption. This chapter begins by discussing which Pareto efficient allocations can be characterized as competitive equilibria with lump-sum transfers. It also discusses existence and characterization of such equilibria without lump-sum transfers. The second half of the chapter focuses on continuum economies, for which such characterization results are much more natural given that agents have negligible influence over equilibrium prices.

Pages: 109 pages
Date: 2007
New Economics Papers: this item is included in nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:wrk:warwec:804

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