Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/80284
Authors: 
Sugden, Robert
Year of Publication: 
2003
Series/Report no.: 
CSERGE Working Paper EDM 03-02
Abstract: 
This paper proposes a formulation of consumer sovereignty, for use in normative economics, which does not presuppose individuals' preferences to be coherent. The fundamental intuition, that opportunity and responsibility have moral value, is formalised as a responsibility criterion for assessing opportunities in an economic system. A model of an exchange economy is presented, in which rational arbitrageurs compete to make profits by trading with non-rational consumers. In equilibrium, this economy satisfies the responsibility criterion. One interpretation of this result is that, in a competitive environment, the overall effects of money pumps are benign, even if individuals' preferences are persistently incoherent.
Subjects: 
consumer sovereignty
money pump
Opportunity
responsibility
Document Type: 
Working Paper

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