Economic Theory of the «Second Worst»

Rosefielde Steven
Additional contact information
Rosefielde Steven: University of North Carolina, Chapel Hill, NC 27599-3305, USA

Higher School of Economics Economic Journal Экономический журнал Высшей школы экономики, 2015, vol. 19, issue 1, 30–44

Abstract: Concepts like rational expectations, workable competition, bounded rationality and the second best are often used informally to suggest that imperfectly competitive market outcomes normally are very good and that it is sometimes appropriate to restrict competition further to achieve even better results. Paul Samuelson’s optimal neoclassical analysis adds plausibility to the inference, but the presumption is profoundly misleading because real markets are bounded rational and corrupt. In Herbert Simon’s satisficing framework expanded to include vicious behavior, second bests are more plausibly interpreted as «second worsts» and comparative merit must be determined with Abram Bergson’s social welfare functions rather than by appeal to the Pareto ideal.

Date: 2015
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://cyberleninka.ru/article/n/economic-theory-of-the-second-worst

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:scn:025886:15730221

Access Statistics for this article

More articles in Higher School of Economics Economic Journal Экономический журнал Высшей школы экономики from CyberLeninka, Федеральное государственное автономное образовательное учреждение высшего образования «Национальный исследовательский университет «Высшая школа экономики»
Bibliographic data for series maintained by CyberLeninka ().