Negative externalities and Sen’s liberalism theorem

Donald Saari () and Anne Petron ()

Economic Theory, 2006, vol. 28, issue 2, 265-281

Abstract: Sen’s seminal, negative theorem about minimal liberalism has had a profound effect on economics, philosophy, and the social sciences. To address concerns raised by his result, we show how Sen’s assumptions must be modified to obtain positive conclusions; e.g., one resolution allows an agent to be decisive only if his choice does not impose “strong negative externalities” on others. We also uncover a significantly different interpretation of Sen’s societal cycles: rather than describing the rights of individuals to choose, the cycles identify when these choices impose difficulties on others. Other ways to address Sen’s difficulties come from game theory. Copyright Springer-Verlag Berlin/Heidelberg 2006

Keywords: Sen’s theorem; Externalities; Paradoxes; Prisoner’s Dilemma; Game theory. (search for similar items in EconPapers)
Date: 2006
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DOI: 10.1007/s00199-005-0622-9

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