The paper provides several axiomatizations of the concept of "path independence" as applied to choice functions defined over finite sets. The axioms are discussed in terms of their relationship to "rationality" postulates and their meaning with respect to social choice models.

Frank DeMeyer, Charles R. Plott; A Welfare Function Using “Relative Intensity” of Preference*, The Quarterly Journal of Economics, Volume 85, Issue 1, 1 Fe

Consider a committee or society attempting to order the alternatives (X_1, X_2, X_3) by use of majority rule. Each individual is assumed to have a strong ordering (called a profile) on the alternatives. "Indifference" is not a property of the profiles. The committee is said to "prefer" X_i to X_j, denoted X_iCX_j if X_i is preferred to X_j on a majority of the individual profiles. It is well known that if certain individual profiles are chosen, the resulting "social ordering" may be cyclical, i.e., X_iCX_j, X_jCX_k, X_kCX_i. Such a result is called a "cycle."

This paper contains a generalization of the General Possibility Theorem to situations where choice over two-element (more generally, “small”) sets is not possible. The analysis is developed in terms of the social choice function formulation rather than the social welfare function approach. In this formulation, assumptions concerning the size of sets of feasible alternatives are explicit, allowing the role of these assumptions in inducing impossibility results to be explored.

In a series of eleven markets, sellers possessed products that were exogenously designated as either grade "regular" or grade "super." Supers were valued more by buyers but grade could not be observed by buyers prior to purchase. Sellers could add costly units of quality to their products that were observable and valued by buyers. The data are analyzed with perfect information models, signaling equilibrium models, and pooling models. A variety of behaviors are observed across the eleven markets. Signaling is observed in most markets with some markets approaching the most efficient signaling equilibrium. Pooling or partial pooling occurs in a few markets. The performance seems to be sensitive to the relative cost of signaling and the market institutional setting.

Information Cascades: Replication and an Extension to Majority Rule and Conformity-Rewarding Institutions by Angela A. Hung and Charles R. Plott. Published in volume 91, issue 5, pages 1508-1520 of American Economic Review, December 2001

Charles R. Plott, Shyam Sunder, A Synthesis, Journal of Accounting Research, Vol. 19, Studies on Standardization of Accounting Practices: An Assessment of Alternative Institutional Arrangements (1981), pp. 227-239

The paper reports on an experimental investigation of four methods of allocating public goods. The two basic processes studied are direct contribution and a public goods auction process. Both of these processes are studied with and without an additional unanimity feature. The results suggest that the auction process outperforms direct contribution. The effect of unanimity is to decrease the efficiency of both processes. Much of the paper is focused on an analysis of these results.

We have attempted here to trace the implications, in terms of operational procedures, of some postulates about the "physical" nature of objects on one hand and individual choice behaviour on the other. We summarize the major result in very loose terms by asserting that if when choosing from among several objects which are characterized by "qualitative" or "ordinal" properties, an individual's choice obeys a transitivity law, then the choice is necessarily" dictated" by one characteristic a lone; that is, the underlying preference must be lexicographic in one of these ordinal properties. The reader must consult the text below for an elaboration on the meaning of the terms emphasized by quotation marks before the proper context of the result can be established.

The idea that markets might aggregate and disseminate information and also resolve conflicts is central to the literature on decentralization (Hurwicz, 1972) and rational expectations (Lucas, 1972). We report on three series of experiments all of which were predicted to have performed identically by the theory of rational expectations. In two of the three series (one in which participants trade a complete set of Arrow-Debreu securities and a second in which all participants have identical preferences), double auction trading leads to efficient aggregation of diverse information and rational expectations equilibrium. Failure of the third series to exhibit such convergence demonstrates the importance of market institutions and trading instruments in achievement of equilibrium.