Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/230318
Authors: 
Daske, Thomas
Year of Publication: 
2021
Abstract: 
This paper draws an incentive-theoretical perspective on the concept of social welfare. In a simple mechanism-design framework, agents' interpersonal preferences and private payoffs are all subject to asymmetric information. Under reasonable normative assumptions, the following result is established: A policy can be implemented with a budget-balanced mechanism if and only if it is consistent with materialistic utilitarianism, which seeks to maximize aggregate material wealth, not utility. Any other policy, to be implementable, must violate budget balance and therefore comes at incentive costs. The corresponding mechanism is virtually unique, which allows for conclusions upon distributive and procedural justice.
Subjects: 
mechanism design
social welfare
distributive justice
procedural justice
utilitarianism
dictatorship
JEL: 
C78
D60
D82
Document Type: 
Working Paper

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