On the transfer and advantageous reallocation paradoxes

✍ Scribed by Milind Rao

• Book ID: 104655772
• Publisher: Springer
• Year: 1992
• Tongue: English
• Weight: 511 KB
• Volume: 9
• Category: Article
• ISSN: 0176-1714
• DOI: 10.1007/bf00187238

✦ Synopsis

It is well known that the transfer and advantageous reallocation paradoxes cannot occur at a Walrasian stable equilibrium in a two agent economy. In an influential recent paper Chichilnisky provided an example of the transfer paradox in the context of a globally Walrasian stable three agent economy. It is evident, though, that the paradoxes depend on the underlying data-tastes, preferences and net export positions-of the economy. This paper characterizes and generalizes the transfer and advantageous reallocation paradoxes: necessary and sufficient conditions on the underlying data of a globally Walrasian stable economy for the occurence of each of these paradoxes are established; the key role of the third agent in generating these paradoxes is clarified. * I would like to thank John Donaldson, Duncan Foley and two anonymous referees of this journal for helpful comments. The usual disclaimers apply. This definition follows Donsimoni and Polemarchakis [6].