Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/159678
Authors: 
Randon, Emanuela
Simmons, Peter
Year of Publication: 
2012
Series/Report no.: 
Quaderni - Working Paper DSE 839
Abstract: 
With preference rigidities we find Pareto optima of an exchange economy, some of which involve unconsumed endowments. We show that such Pareto Optima can only be attained as market equilibria if there is a top dog in the initial endowment distribution who is richer than the other individuals. The most inegalitarian efficient allocation favouring the top dog is globally stable and is in the core. For endowment distributions with a top dog, the core contains efficient allocations more equal than the market equilibrium. A voting mechanism or government policy can also offset the top dog's power.
JEL: 
D50
D61
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by-nc/3.0/
Document Type: 
Working Paper

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