Knowledge that Transforms

[The optimal policy prescription in response to congestion on a traffic network involves taxes levied so as to increase the private costs of vehicle use by the amount of the costs imposed on other users of the system. However, technical and political constraints may make this taxation policy infeasible. Using assumptions on the effect of taxation on the level and structure of demandfor transportation services, this paper provides guidelines for taxation (and possibly subsidization) in a multi-mode traffic system in which such constraints are effective.]

[In recent studies of economic organization [9 and 15] it has been found necessary to impose certain restrictions (regularity conditions) on the communication process. Such restrictions limit the class of environments for which the organization is Pareto satisfactory. We show that a class of environments admits a Pareto satisfactory (and regular) resource allocation mechanism if and only if the graph of the Pareto correspondence is a union of continuous functions. We also study the shape of the Pareto set for a given environment and the way that set varies as the environment varies. We present examples showing that near any environment whose Pareto utility frontier is homeomorphic to a simplex there is whose Pareto frontier is badly chopped up. We also give an example of a class of environments for which the Pareto correspondence has no continuous selection through a given point.]

[A convenient technique used for solving several types of economic problems is to cast them as optimization problems having the line integral of the (inverse) demand and/or supply functions in the objective. But if these functions are non-integrable (having a nonsymmetric Jacobian matrix) then alternative techniques must be used. This paper surveys these and proposes an additional solution technique, based on making the given functions integrable by making a small number of substitutions and iteratively adjusting a parameter associated with each substitution until a solution is found. The technique is particularly applicable when certain neoclassical assumptions are satisfied.]

[This review of the work done on the formulation and estimation of complete systems of consumer demand functions is primarily concerned with problems and issues around this topic. These issues are partly of a theoretical and partly of an empirical nature. Constraints on such systems, derived from theoretical considerations, are used to deal with the problems of lack of sufficient data, but can sometimes also be tested. Among the various alternative approaches, as yet no clear-cut choice can be made, although it appears that additivity of preferences is too restrictive.]

[Available theorems establishing the existence of general equilibrium in models incorporating imperfectly competitive firms rely on the assumption that reaction curves are continuous functions (or convex-valued, upper hemi-continuous correspondences). However, this property has not been derived from conditions on the fundamental data of tastes, technology, and maximizing behavior. We show here that continuity may fail even in extremely simple cases, with the result that equilibrium price and/or quantity choices fail to exist. The non-pathological nature of the examples we present suggests the need for a fundamental re-examination of the way our partial and general equilibrium models of monopolistic competition fit together.]

[Regularity conditions in social welfare analysis can be seen as ways of making specific types of information "inadmissible" in welfare judgements: the evaluation is made invariant with respect to information of those types. In this sense, these conditions--often reflecting "principles" of judgement--serve also as informational constraints. In this lecture alternative approaches to social welfare evaluation are examined in this light. The analysis covers both Arrovian and Bergson--Samualsonian social welfare functions as well as principles underlying utilitarianism, Rawlsian conception of justice, notions of liberty and egality, and "historical" theories of rights and entitlements (e.g., Marx or Nozick).]

[It is shown that, in a wide class of economies with Marshallian externalities, a Pareto optimum can be sustained by a competitive equilibrium with the aid of a tax-subsidy system. The tax-subsidy system consists of commodity taxes, commodity subsidies, lump-sum taxes, and lump-sum subsidies. The model can be interpreted as describing an economy with various kinds of public goods.]