Welfare Economics and Social Choice Theory

This book covers the main topics of welfare economics — general equilibrium models of exchange and production, Pareto optimality, un­ certainty, externalities and public goods — and some of the major topics of social choice theory — compensation criteria, fairness, voting. Arrow's Theorem, and the theory of implementation. 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...