A Top Dog Tale with Preference Rigidities

Randon, Emanuela ; Simmons, Peter (2012) A Top Dog Tale with Preference Rigidities. DOI 10.6092/unibo/amsacta/3327.
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With preference rigidities we find Pareto optima of an exchange economy, some of which involve unconsumed endowments. We show that such Pareto Optima can only be attained as market equilibria if there is a top dog in the initial endowment distribution who is richer than the other individuals. The most inegalitarian efficient allocation favouring the top dog is globally stable and is in the core. For endowment distributions with a top dog, the core contains efficient allocations more equal than the market equilibrium. A voting mechanism or government policy can also offset the top dog’s power.

Tipologia del documento
Monografia (Working paper)
Randon, Emanuela
Simmons, Peter
Parole chiave
Exchange economy; Complements; Top dog allocation.
Settori scientifico-disciplinari
Data di deposito
05 Lug 2012 13:37
Ultima modifica
08 Ott 2012 09:32

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