On the robustness of laissez-faire Export

@article{citeulike:6082933, abstract = {This paper considers a model economy in which agents are privately informed about their type: their endowments of various goods and their preferences over these goods. While preference orderings over observable choices are allowed to be correlated with an agent's private type, we assume that the planner/government is both uncertain about the nature of this joint distribution and unable to choose among multiple equilibria of any given social mechanism. We model the planner/government as having a maxmin objective in the face of this uncertainty. Our main theorem is as follows: Once we allow for this kind of uncertainty and assume no wealth effects in preferences, the uniquely optimal social contract is laissez-faire, in which agents trade in unfettered markets with no government intervention of any kind.}, author = {Kocherlakota, N. and Phelan, C.}, citeulike-article-id = {6082933}, citeulike-linkout-0 = {http://dx.doi.org/10.1016/j.jet.2008.09.004}, citeulike-linkout-1 = {http://linkinghub.elsevier.com/retrieve/pii/S0022053108001403}, day = {24}, doi = {10.1016/j.jet.2008.09.004}, issn = {00220531}, journal = {Journal of Economic Theory}, keywords = {mechanism\_design, welfare\_economics}, month = {November}, posted-at = {2009-11-07 13:57:30}, priority = {3}, title = {On the robustness of laissez-faire}, url = {http://dx.doi.org/10.1016/j.jet.2008.09.004}, year = {2008} }

TY - JOUR ID - citeulike:6082933 L3 - citeulike-article-id:6082933 N2 - This paper considers a model economy in which agents are privately informed about their type: their endowments of various goods and their preferences over these goods. While preference orderings over observable choices are allowed to be correlated with an agent's private type, we assume that the planner/government is both uncertain about the nature of this joint distribution and unable to choose among multiple equilibria of any given social mechanism. We model the planner/government as having a maxmin objective in the face of this uncertainty. Our main theorem is as follows: Once we allow for this kind of uncertainty and assume no wealth effects in preferences, the uniquely optimal social contract is laissez-faire, in which agents trade in unfettered markets with no government intervention of any kind. JF - Journal of Economic Theory SN - 00220531 TI - On the robustness of laissez-faire KW - mechanism_design KW - welfare_economics AU - Kocherlakota, N AU - Phelan, C PY - 2008/11/24/ UR - http://dx.doi.org/10.1016/j.jet.2008.09.004 ER -