Negative externalities and Sen’s liberalism theorem |
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Authors: | Donald G Saari Anne Petron |
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Institution: | (1) Institute for Mathematical Behavioral Science, University of California, CA 92697-5100 Irvine, USA;(2) GEMMA, Université de Caen, 14032 Caen, FRANCE |
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Abstract: | Summary. Sen’s seminal, negative theorem about minimal liberalism has had a profound effect on economics, philosophy, and the social sciences. To address concerns raised by his result, we show how Sen’s assumptions must be modified to obtain positive conclusions; e.g., one resolution allows an agent to be decisive only if his choice does not impose “strong negative externalities” on others. We also uncover a significantly different interpretation of Sen’s societal cycles: rather than describing the rights of individuals to choose, the cycles identify when these choices impose difficulties on others. Other ways to address Sen’s difficulties come from game theory.Received: 14 October 2004, Revised: 7 March 2005, JEL Classification Numbers:
D71, C70, D62.Donald G. Saari: Correspondenc toThe research of D. Saari was supported by NSF grant DMI-0233798. Our thanks to P. Hammond for suggesting some useful references. Some of our joint results were reported in Brunel (now Petron) (1998). |
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Keywords: | Sen’ s theorem Externalities Paradoxes Prisoner’ s Dilemma Game theory |
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