An Algebraic Index Theorem for Non-smooth Economies

In this paper, we prove an existence theorem for equilibria in production economies with increasing returns, which generalizes the classic results on this topic. In particular, we eliminate both the free-disposal assumptions and any smoothness requirements on the boundary of the production sets. For this purpose, we propose a new definition of the topological degree for non-convex-valued correspondences defined on non-smooth topological manifolds.Non-smooth production ; non-convex production ; topological degree ; local homology ; increasing returns

The Limit-Price Dynamics — Uniqueness, Computability and Comparative Dynamics in Competitiive Markets

In this paper, a continuous-time price-quantity trading process is defined for exchange economies with differentiable characteristics. The dynamics is based on boundedly rational agents exchanging limit-price orders to a central clearing house, which rations infinitesimal trades according to Mertens (2003) double auction. Existence of continuous trade and price curves holds under weak conditions and in particular even if there is no long-run competitive equilibrium. Every such curve converges towards a Pareto point, and every Paretian allocation is a locally stable rest-point. Generically, given initial conditions, the trade and price curve is piecewise unique, smooth and computable, hence enables to effectively perform comparative dynamics. Finally, in the 2 x 2 case, the vector field induced by the limit-price dynamics is real-analytic.Non-tatonnement, price-quantity dynamics, limit-price mechanism, myopia, computable general equilibrium.

Is the Veil of Ignorance Transparent ?

Theories of justice in the spirit of Rawls and Harsanyi argue that fair-minded people should aspire to make choices for society as if in the original position, that is, behind a veil of ignorance that prevents them from knowing their own social positions. In this paper, we provide a fairly simple framework showing that preferences in front of the veil of ignorance (i.e., in face of everyday risky situations) can be entirely deduced from ethical preferences behind the veil. Moreover, by contrast with Kariv & Zame (2008), in many cases of interest, the converse is not true : Ethical decisions cannot be deduced from economic ones. This not only rehabilitates distributive theories of justice but even proves that standard decision theory in economic environments cannot be exonerated from ethical questioning.Moral preferences, business ethics, social preferences, distributional justice, theory of justice, social choice, original position, veil of ignorance, utilitarianism, maximin principle, uncertainty.

Is the Veil of Ignorance Transparent?

Theories of justice in the spirit of Rawls and Harsanyi argue that fair-minded people should aspire to make choices for society as if in the original position, that is, behind a veil of ignorance that prevents them from knowing their own social positions in society. In this paper, we provide a framework showing that preferences in front of the veil of ignorance (i.e., in face of every day risky situations) are entirely determined by ethical preferences behind the veil. Moreover, by contrast with Kariv & Zame (2008), in many cases of interest, the converse is not true: ethical decisions cannot be deduced from economic ones. This not only rehabilitates distributive theories of justice but even proves that standard decision theory in economic environments cannot be separated from ethical questioning.Business Ethics; Distributional Justice; Maximin Principle; Moral Preferences; Original Position; Social Choice; Social Preferences; Theory of Justice; Utilitarianism; Veil of Ignorance

Is the Veil of Ignorance Transparent ?

Theories of justice in the spirit of Rawls and Harsanyi argue that fair-minded people should aspire to make choices for society as if in the original position, that is, behind a veil of ignorance that prevents them from knowing their own social positions in society. In this paper, we provide a framework showing that preferences in front of the veil of ignorance (i.e., in face of everyday risky situations) are entirely determined by ethical preferences behind the veil. Moreover, by contrast with Kariv & Zame (2008), in many cases of interest, the converse is not true : ethical decisions cannot be deduced from economic ones. This not only rehabilitates distributive theories of justice but even proves that standard decision theory in economic environments cannot be separated from ethical questioning.Moral preferences, business ethics, social preferences, distributional justice, theory of justice, social choice, original position, veil of ignorance, utilitarianism, maximin principle.

The Exact Insensitivity of Market Budget Shares and the "Balancing Effect"

We reformulate Grandmont's and its successors' notion of behavioral heterogeneity such as to get the exact insensitivity of the aggregate budget share function with respect to changes in prices and income, instead of a mere approximate insensitivity. We propose a non parametric set-up such that, if the population is distributed according to some "uniform" probability measure, the aggregate budget share function is constant. The important contribution is that this exact insensitivity is not explained by any insensitivity at the microeconomic level but rather by an exact "balancing effect". We give illustrative examples of populations that fulfill our requirements.Aggregation of demand, behavioral heterogeneity, balancing effect, large economy, Law of demand.

In search of an alternative to shareholder value maximization

This paper argues that mainstream economic theory, far from providing an indisputable plea in favor of shareholder value-maximization, offers striking arguments showing quite the opposite : profit-maximization cannot be a legitimate goal for private firms. This opens the door for a widening of a company's goal. We argue that it should include the concern of all the stakeholders of a company, and cannot be adequately addressed uniquely by Pigouvian taxes or by property rights. Coming to terms with this broad understanding of a company's goal should imply the internalization of the stakeholders' concern within the legal structure of the firm -- as in the case of the SCIC in France or the CIC in the UK.Corporate social responsibility, shareholder value, stakeholder value, incomplete markets, limited liability, property rights, collateral, cooperative.

Relational Capability: An Indicator of Collective Empowerment

We define a new index for the collective empowerment of populations based on the capability of actors to have relationships and to enter into networks. This index, called “relational capability” (RC), is dynamic in the sense that the weights of its various components vary across time according to how close the population is to some poverty threshold. It relies on a shift of anthropological viewpoint, putting human relationships at the forefront. RC, which can be formalized in gametheoretic terms of networks, paves the way towards the solution of a number of unsolved issues: Reconciling autonomy and interdependence; unifying the aggregation of individual characteristics with the collective level; questioning unjust institutions and political structures within Sen’s and Nussbaum’s framework of capabilities.Empowerment; Escaping Poverty Index; Index; Relational Capability

Strategic Market Games with a Finite Horizon and Incomplete.

We study a strategic market game associated to an intertemporal economy with a finite horizon and incomplete markets. We demonstrate that generically, for any finite number of players, every sequentially strictly individually rational and default-free stream of allocations can be approximated by a full subgame-perfect equilibrium. As a consequence, imperfect competition may Pareto-dominate perfect competition when markets are incomplete. Moreover — and this contrasts with the main message conveyed by the market games literature — there exists a large open set of initial endowments for which full subgame-perfect equilibria do not converge to η- efficient allocations when the number of players tends to infinity. Finally, strategic speculative bubbles may survive at full subgame-perfect equilibria.Market Games, Folk Theorem, Incomplete Markets, Bubbles.

Relational Capability : An Indicator of Collective Empowerment

Nous définissons un nouvel indicateur de l'empowerment collectif des populations, basé sur la capacité des acteurs à entrer en relation et à participer à des réseaux. Cet indicateur de " capacité relationnelle " (RC) est dynamique au sens où les pondérations attribuées à ses composantes varient dans le temps selon la façon dont une population se rapproche d'un certain seuil de pauvreté. Elle se fonde sur un changement de perspective anthropologique, qui place les relations humaines au premier plan. La capacité relationnelle, qui peut être formalisée selon le modèle de la théorie des jeux appliquée aux réseaux, ouvre des perspectives de résolution de plusieurs problèmes : réconcilier l'autonomie et l'interdépendance ; unifier l'agrégation des caractéristiques individuelles avec le niveau collectif ; mettre en question les institutions et les structures politiques injustes, dans le cadre de l'approche des capacités définie par Sen et Nussbaum.Capacité relationnelle ; Empowerment ; Indicateur ; Indicateur de sortie de pauvreté