Liberalism, Efficiency, and Stability: Some Possibility Results

Research output: Contribution to JournalArticleAcademicpeer-review

Abstract

Drawing on the game-theoretic analysis of rights, this paper re-examines the relation between liberal principles of decision making, on the one hand, and demands for stability and efficiency, on the other. Two possibility results are obtained. First, rights assignments in which individuals enjoy maximal freedom are shown to ensure the stability and efficiency of the decision process: there is always at least one Nash equilibrium with a Pareto-optimal outcome. Second, it is shown that a universal right to be completely passive, together with a mild condition on the social decision mechanism, also guarantees stability and efficiency. Journal of Economic Literature Classification Number: D71. © 1999 Academic Press.
Original languageEnglish
Pages (from-to)294-309
Number of pages16
JournalJournal of Economic Theory
Volume88
Issue number2
DOIs
Publication statusPublished - Oct 1999

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Liberalism
Decision making
Nash equilibrium
Decision process
Guarantee
Assignment
Economics

Keywords

  • Collective choice
  • Liberal paradox
  • Rights

Cite this

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abstract = "Drawing on the game-theoretic analysis of rights, this paper re-examines the relation between liberal principles of decision making, on the one hand, and demands for stability and efficiency, on the other. Two possibility results are obtained. First, rights assignments in which individuals enjoy maximal freedom are shown to ensure the stability and efficiency of the decision process: there is always at least one Nash equilibrium with a Pareto-optimal outcome. Second, it is shown that a universal right to be completely passive, together with a mild condition on the social decision mechanism, also guarantees stability and efficiency. Journal of Economic Literature Classification Number: D71. {\circledC} 1999 Academic Press.",
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Liberalism, Efficiency, and Stability: Some Possibility Results. / Van Hees, Martin.

In: Journal of Economic Theory, Vol. 88, No. 2, 10.1999, p. 294-309.

Research output: Contribution to JournalArticleAcademicpeer-review

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