Economic Theory

, Volume 13, Issue 3, pp 629–642 | Cite as

Exchange and optimality

  • S. Ghosal
  • H. M. Polemarchakis

Summary.

A feasible social state is irreducible if and only if, for any non-trivial partition of individuals into two groups, there exists another feasible social state at which every individual in the first group is equally well-off and someone strictly better-off. Competitive equilibria decentralize irreducible Pareto optimal social states.

Keywords and Phrases: Social states Optimality Exchange. JEL Classification Numbers: C70 C72 D60 D62. 

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Copyright information

© Springer-Verlag Berlin Heidelberg 1999

Authors and Affiliations

  • S. Ghosal
    • 1
  • H. M. Polemarchakis
    • 2
  1. 1.Department of Economics, Queen Mary and Westfield College, University of London, Mile End Road, London E1-4NS, UKGB
  2. 2.CORE, Université Catholique de Louvain, 34 voie du Roman Pays, B-1348 Louvain-la-Neuve, BELGIUM (e-mail: hp@core.ucl.ac.be)BE

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