In this lecture, we pivot from cardinal social welfare to a Paretian perspective where we use Pareto optimality to rank outcomes in terms of their aggregate social welfare. To make this Paretian perspective practical, we introduce Kaldor-Hicks "potential Pareto" improvements. This allows us to assess which market equilibria are socially efficient (in the Kaldor-Hicks sense).
Whiteboard notes for this lecture can be found at:
https://www.dropbox.com/s/sn425orkqjbyziv/LectureC5-2020-10-01-Paretian_Perspective_and_Mkt_Efficiency-Notes.pdf?dl=0
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