Abstract
For any intransitive community preference, we construct a non-convex economy where all the marginal cost pricing general equilibria are Pareto inefficient (theorem 3.2). The result is valid without requiring a fixed income distribution rule (corollary 3.3). Intransitive community preferences are a frequent occurrence (theorem 3.1): necessary and sufficient conditions for transitivity of the community preference fail in a set which is open and dense in the space of individual preferences with a standard topology.
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Chichilnisky, G. General equilibrium and social choice in economies with increasing returns. Ann Oper Res 23, 289–297 (1990). https://doi.org/10.1007/BF02204853
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DOI: https://doi.org/10.1007/BF02204853