Social objectives in general equilibrium
Economics Letters, 2016, vol. 148, issue C, 99-102
I consider an exchange economy in which each agent’s preferences are given by Ui=ui+θF, where ui is a standard utility function, F is a social objective function and θ is the weight F receives. Both F and θ are common to all individuals. I show that F’s equilibrium value may be a decreasing function of θ. I also show that if F is a social welfare function whose arguments are the ui’s, then the economy’s equilibria are independent of θ.
Keywords: General equilibrium; Consumption externalities; Other-regarding preferences; Social objectives (search for similar items in EconPapers)
JEL-codes: D50 D62 (search for similar items in EconPapers)
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