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GAINS FROM TRADE
Author(s) -
Chambers Christopher P.,
Hayashi Takashi
Publication year - 2017
Publication title -
international economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.658
H-Index - 86
eISSN - 1468-2354
pISSN - 0020-6598
DOI - 10.1111/iere.12240
Subject(s) - nobody , axiom , economics , allocative efficiency , context (archaeology) , mathematical economics , constraint (computer aided design) , microeconomics , set (abstract data type) , mathematics , computer science , paleontology , geometry , programming language , biology , operating system
In a social choice context, we ask whether there exists a rule in which nobody loses under trade liberalization. We consider a resource allocation problem in which the traded commodities vary. We propose an axiom stating that enlarging the set of tradable commodities hurts nobody. We show that if a rule satisfies this axiom, together with an allocative efficiency axiom and an institutional constraint axiom stating that only preferences over tradable commodities matter, gains from trade can be given to only one individual in the first step of liberalization.