Benefit function and individual preferences. A generalization of the zero-maximum principle

In this paper we show that given a utility threshold Luenbergerâ€™s benefit function correctly represents individual preferences as long as specific reference commodity bundles are considered. We further show a condition which is sufficient for reaching Pareto optimality that generalizes the zero-maximum principle proposed by Luenberger. Under our hypothesis, the social benefit could be positive, negative or zero, and not necessarily always zero.

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Year of publication:	2012
Authors:	Aparicio, Juan ; Pastor, Jesus T.
Published in:	Economics and Business Letters. - Departamento de Economía. - Vol. 1.2012, 1, p. 12-20
Publisher:	Departamento de Economía

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Extent:	text/html
Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011208146