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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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Abstract

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.

Document type:Monograph (Working Paper)
Uncontrolled Keywords:Exchange economy; Complements; Top dog allocation.
Subjects:Area 13 - Scienze economiche e statistiche > SECS-P/01 Economia politica
Area 13 - Scienze economiche e statistiche > SECS-P/02 Politica economica
Area 13 - Scienze economiche e statistiche > SECS-P/03 Scienza delle finanze
DOI:10.6092/unibo/amsacta/3327
Depositato da:Emanuela Randon
Depositato il:05 Jul 2012 15:37
Last modified:08 Oct 2012 11:32

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