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Characterising competitive equilibrium in terms of opportunity

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  • Robert Sugden

    (University of East Anglia, UK)

Abstract

This paper is the first draft of a technical appendix to a chapter of a book I am writing, with the provisional title The Community of Advantage. The central argument of the book will be that many elements of the (classically) liberal tradition of normative economics do not depend on assumptions about individual rationality, and so it is possible for a behavioural economist to work in that tradition. I will propose an approach to normative economics that differs both from neoclassical welfare economics and from the various variants of soft paternalism that are currently being proposed by behavioural economists. My approach has two distinctive features. First, it is written from a contractarian perspective. That is, it is addressed to citizens as potential parties to mutually beneficial agreements, and not to an imagined benevolent despot or social planner. (A first draft of this part of the argument has been published as Sugden [2013].) Second, its normative criterion is opportunity, not welfare, happiness or well-being. Sections 1 to 4 of this paper follow the analysis in McQuillin and Sugden (2012), specialised to the one-period case and with minor changes in notation. The set-up, and the definition of the ‘opportunity criterion’ are slightly different from those used in Sugden (2004). The differences are explained in McQuillin and Sugden (2012). The argument in Section 5 is new.

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  • Robert Sugden, 2014. "Characterising competitive equilibrium in terms of opportunity," Working Papers 14-02, Chapman University, Economic Science Institute.
  • Handle: RePEc:chu:wpaper:14-02
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    References listed on IDEAS

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    1. Robert Sugden, 2004. "The Opportunity Criterion: Consumer Sovereignty Without the Assumption of Coherent Preferences," American Economic Review, American Economic Association, vol. 94(4), pages 1014-1033, September.
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    7. Ben McQuillin & Robert Sugden, 2012. "How the market responds to dynamically inconsistent preferences," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 38(4), pages 617-634, April.
    8. Basu, K. & Pattanaik, P. K. & Suzumura, K. (ed.), 1995. "Choice, Welfare, and Development: A Festschrift for Amartya K. Sen," OUP Catalogue, Oxford University Press, number 9780198287896.
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    2. Mozaffar Qizilbash, 2019. "The market, utilitarianism and the corruption argument," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 66(1), pages 37-55, March.

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    More about this item

    JEL classification:

    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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