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Full-Text Articles in Social and Behavioral Sciences
A Credit Mechanism For Selecting A Unique Competitive Equilibrium, Cheng-Zhong Qin, Martin Shubik
A Credit Mechanism For Selecting A Unique Competitive Equilibrium, Cheng-Zhong Qin, Martin Shubik
Cowles Foundation Discussion Papers
The enlargement of the general-equilibrium structure to allow default subject to penalties to appririate credit limits and default penalties results in a construction of a simple mechanism for a credit using society. We show that there generically exists a price-normalizing bundle that determines a credit money along with appropriate credit limmits and default penalties for a credit mechanism to select a unique competitive equilibrium (CE). With some additional conditions, a common credit money can be applied such that any CE can be a unique selection by the credit mechanism with appropriate credit limits default penalties for the traders. This will …
The Nonparametric Approach To Applied Welfare Analysis, Donald J. Brown, Caterina Calsamiglia
The Nonparametric Approach To Applied Welfare Analysis, Donald J. Brown, Caterina Calsamiglia
Cowles Foundation Discussion Papers
Changes in total surplus and deadweight loss are traditional measures of economic welfare. We propose necessary and sufficient conditions for rationalizing consumer demand data with a quasilinear utility function. Under these conditions, consumer surplus is a valid measure of consumer welfare. For nonmarketed goods, we propose necessary and sufficient conditions on market data for efficient production , i.e., production at minimum cost. Under these conditions we derive a cost function for the nonmarketed good, where producer surplus is the area above the marginal cost curve.