Welfare Economics and Social Choice Theory

Welfare Economics and Social Choice Theory

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Springer-Verlag New York, LLC
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Welfare Economics and Social Choice Theory

This book covers the main topics of welfare economics - general equilib­ rium models of exchange and production, Pareto optimality, externalities and public goods - and some of the major topic of social choice the­ ory - compensation criteria, fairness, voting, Arrow's Theorem, and stra­ tegic behavior. The underlying question is this: "Is a particular economic or voting mechanism good or bad for society?" Welfare economics is mainly about whether the market mechanism is good or bad; social choice is largely about whether voting mechanisms can improve upon the results of the market. The book grew out of my undergraduate welfare economics course at Brown University, and it is intended for the undergraduate student who has some prior familiarity with microeconomics. However the book is also use­ ful for graduate students and professionals, economists and non-econo­ mists, who want an overview of welfare and social choice results unbur­ dened by detail and mathematical complexity.

Product Details

ISBN-13: 9780898380330
Publisher: Springer-Verlag New York, LLC
Publication date: 02/25/2004
Edition description: Older Edition
Pages: 244
Product dimensions: 7.28(w) x 8.48(h) x 0.65(d)

Table of Contents

The Concerns of Welfare Economics.- The Concerns of Social Choice Theory.- Practical Concerns of Welfare Economics and Social Choice Theory.- 1 Preferences and Utility.- Fundamental Assumptions.- Best Alternatives and Utility Functions.- The Formal Model of Preferences.- to Social Preferences.- Exercises.- Selected References.- 2 Barter Exchange.- Allocations.- The Edgeworth Box Diagram.- Pareto Optimal Allocations and the Core.- Algebraic Examples.- Final Notes on the Core: The Number of Coalitions.- Exercises.- Selected References.- 3 Market Exchange and Optimality.- The Two-Person, Two-Goods Model.- Competitive Equilibrium in an Exchange Economy: Formal Preliminaries.- The First Fundamental Theorem of Welfare Economics.- The Second Fundamental Theorem of Welfare Economics.- An Algebraic Example.- Exercises.- Selected References.- 4 Production and Optimality.- Optimal Production Plans.- Competitive Equilibrium Production Plans.- The First Fundamental Theorem of Welfare Economics, Production Version.- The Second Fundamental Theorem of Welfare Economics, Production Version.- Extending the Production Model, and Combining Production and Exchange.- An Algebraic Example in a Simple Production Model.- Exercises.- Selected References.- 5 Externalities.- Externalities in an Exchange Economy: An Example.- Pigouvian Taxes and Subsidies: The Exchange Example Continued.- Pigouvian Taxes and Subsidies: A Production Example.- Exercises.- Selected References.- 6 Public Goods.- The Public Goods Model.- The Samuelson Public Good Optimality Condition.- Private Financing of the Public Good and the Free Rider Problem.- The Wicksell-Lindahl Tax Scheme.- Fixed Tax Shares and Majority Voting.- The Demand-Revealing Tax Scheme.- The Groves-Ledyard Tax Scheme.- Selected References.- 7 Compensation Criteria.- Notational Preliminaries.- The Pareto Criterion.- The Kaldor Criterion.- The Scitovsky Criterion.- The Samuelson Criterion.- Exercises.- Selected References.- 8 Fairness and the Rawls Criterion.- Fairness.- The Rawls Criterion.- Exercises.- Selected References.- 9 Majority Voting.- The Majority Voting Criterion.- Majority Voting and Single-Peakedness.- Majority Voting and Single-Peakedness: The Multidimensional Case.- Exercises.- Selected References.- 10 Arrow’s Impossibility Theorem.- The Model.- Requirements on the Collective Choice Rule.- Applying the Requirements.- Arrow’s Impossibility Theorem.- Relaxing the Universality Requirement.- Reaction to Arrow’s Impossibility Theorem.- Exercises.- Selected References.- 11 Strategic Behavior.- Examples of Strategic Behavior.- The Gibbard-Satterthwaite Impossibility Theorem.- Significance of the Gibbard-Satterthwaite Theorem.- Exercises.- Selected References.- 12 Epilog.- Author Index.

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