Benefit function and individual preferences. A generalization of the zero-maximum principle
Juan Aparicio () and
Economics and Business Letters, 2012, vol. 1, issue 1, 12-20
In this paper we show that given a utility threshold Luenbergerâ€™s benefit function correctly represents individual preferences as long as specific reference commodity bundles are considered. We further show a condition which is sufficient for reaching Pareto optimality that generalizes the zero-maximum principle proposed by Luenberger. Under our hypothesis, the social benefit could be positive, negative or zero, and not necessarily always zero.
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Persistent link: https://EconPapers.repec.org/RePEc:ove:journl:aid:9228
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