Resource Allocation Mechanisms

Luis Corchon

Chapter 2 in The Theory of Implementation of Socially Optimal Decisions in Economics, 1996, pp 25-38 from Palgrave Macmillan

Abstract: Abstract In the previous chapter we presented some concepts of equilibrium which had a certain appeal from the normative point of view. However they were not totally satisfactory as a positive description of how an economy works for two reasons. Firstly, we needed an auctioneer to announce the price schedule. Unless this auctioneer was perfectly informed (which is in some sense self-defeating) we need to assume that people behave truthfully. Secondly, we only considered market mechanisms. While the first reason points out a possible inconsistency of the model, the second refers to a wider question: since Plato, various authors have imagined alternative societies to the one based on the market that were reputed to be optimal from the point of view of some ethical criterion (the name utopia echoes the title of the famous book by Sir Thomas More). In general, the advocates of such societies were not excessively worried about the human behavior being selfish and maximizing (in tune with Hobbes’s sentence ‘man is a wolf for man’) and consequently they did not deal with the problem of the agents having incentives to follow the rules of such societies. The adjective ‘utopic’ therefore came to have a pejorative connotation, indicating that such forms of social organization were destined to fail, at least as long as men behaved in accordance with the assumptions of the ‘homo economicus’.

Keywords: Nash Equilibrium; Social Choice; Optimal Decision; Social Choice Function; Equilibrium Concept (search for similar items in EconPapers)
Date: 1996
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:pal:palchp:978-0-230-37283-2_2

Ordering information: This item can be ordered from
http://www.palgrave.com/9780230372832

DOI: 10.1057/9780230372832_2

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().