Figure 2 - uploaded by Andreas Bergh
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The Edgeworth exchange box. Any point on the horizontal axes represents a distribution of good A between individual 1 and 2, and any point on the vertical axes represents a distribution of good B. Using indifference curves we see that for some allocations (such as allocation 1), both individuals can increase their utility by exchanging goods with each other. For Pareto efficient allocations, this is not the case (allocation 4). The contract curve connects all Pareto efficient allocations.
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... of all, there may be several allocations that are all Pareto efficient but no criterion regarding how to chose between these allocations. For example, if the initial distribution of goods A and B is given by the point 1 in figure 2, then the set of all Pareto efficient allocations that can be reached through voluntary exchange from 1 will be the bold segment of the contract curve that lies between both individuals' indifference curves through the point 1. At point 2, individual 1 is indifferent between the initial and the final distribution of goods, and individual 2 has received all the gains from voluntary exchange. ...
Citations
... 54 Begg et al. (1987). Se även Bergh (2005) för en översikt kring New Welfare Economics och dess syn på fattigdom. 55 Ett samhälle är Pareto-optimalt när det vid en rådande tillgång på resurser och tekniskt kunnande inte är möjligt att åstadkomma en förbättring för någon utan att det samtidigt blir en försämring för någon annan. ...
... 160 Det finns många möjligheter för en individ att felallokera utbildningsresurser, något som ökar risken för fattigdom. Batchelder understryker att en bristande ambition att lära sig och att studera vidare eller att studera till yrken som kommer att försvinna är exempel på felallo-157 Se den diskussion Bergh (2005) kerad utbildning. "If educational resources were properly allocated /.../ the people affected could move into jobs that maximized their productivity. ...
In this essay I discuss different normative foundations - theories of political ethics, for proposed cures to market failures. In addition to empirically match what cure fit what type of market failure, I posit the notion that the normative position of an economist, or policy maker, or of a group, concerned with these problems, delimits the options available for recommending, or analysing, what corrective measures that needs be taken to restore markets to efficiency. Two theoretical normative positions, one utilitarian and one libertarian, is constructed to argue the point that different normative positions will yield different permissible actions. The analysis is conducted against the background of different rational choice models, i.e., 'thin' and 'thick' rationality, both of which has profound impacts on both the theory of market failure itself, and on the proposed cures.
