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Welfare dynamics based on a new concept of inefficient equilibrium

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  • Zaman, Md Monowaruz

Abstract

This article has developed a new model of welfare dynamics under imperfect information or imperfect competition by introducing a new concept of ‘inefficient welfare equilibrium’. It assumes that an economy can be split into two virtual parts. For one part the fundamental welfare theorems are valid and for the other part welfare is yet to achieve. This model is enhanced to describe market dynamics where market is not uniform but distributed in layers of energy states. The probability of achieving Pareto efficiency decreases down along the market energy states.

Suggested Citation

  • Zaman, Md Monowaruz, 2008. "Welfare dynamics based on a new concept of inefficient equilibrium," MPRA Paper 11303, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:11303
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    References listed on IDEAS

    as
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    2. G. Hodgson, 2007. "What Are Institutions?," Voprosy Ekonomiki, NP Voprosy Ekonomiki, issue 8.
    3. Joseph E. Stiglitz, 2000. "The Contributions of the Economics of Information to Twentieth Century Economics," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(4), pages 1441-1478.
    4. Simon, Herbert A, 1986. "Rationality in Psychology and Economics," The Journal of Business, University of Chicago Press, vol. 59(4), pages 209-224, October.
    5. G. Hodgson., 2007. "What Are Institutions?," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 8.
    6. Joseph E. Stiglitz, 1991. "The Invisible Hand and Modern Welfare Economics," NBER Working Papers 3641, National Bureau of Economic Research, Inc.
    7. George J. Stigler, 1967. "Imperfections in the Capital Market," Journal of Political Economy, University of Chicago Press, vol. 75(3), pages 287-287.
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    Citations

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    Cited by:

    1. Leisa Perch, 2011. "Mitigation of What and by What? Adaptation by Whom and for Whom? Dilemmas in Delivering for the Poor and the Vulnerable in International Climate Policy," Working Papers 79, International Policy Centre for Inclusive Growth.
    2. Leisa Perch, 2010. "Maximizing Co-Benefits: Exploring Opportunities to Strengthen Equality and Poverty Reduction through Adaptation to Climate Change," Working Papers 75, International Policy Centre for Inclusive Growth.
    3. Zaman, Md Monowaruz, 2010. "An Unbiased Pareto Improvement strategy for poverty alleviation," MPRA Paper 27800, University Library of Munich, Germany.
    4. Zaman, Monowaruz, 2018. "Economics of Information Biasing: A Unified Economic Theory That Leads to New Sustainability Concepts," MPRA Paper 86527, University Library of Munich, Germany, revised 24 Apr 2018.

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    More about this item

    Keywords

    Pareto efficiency; Pareto improvement; information; principal-agent problem; welfare; poverty; bottom-up economics; information asymmetry; market energy; welfare dynamics;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D52 - Microeconomics - - General Equilibrium and Disequilibrium - - - Incomplete Markets
    • D60 - Microeconomics - - Welfare Economics - - - General
    • D49 - Microeconomics - - Market Structure, Pricing, and Design - - - Other

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