The permissible and the forbidden

Michael Richter*, Ariel Rubinstein

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

9 Scopus citations

Abstract

In many economic situations, neither prices nor authority rules. Rather, individual behavior is governed by social norms that specify what is allowed (socially acceptable) and what is forbidden (socially unacceptable). These norms can emerge in a decentralized way and can serve as a method to bring order to economic situations. The key component of our solution concept is a uniform permissible set which plays a role parallel to that of a price system in competitive equilibrium. The concept is analyzed and applied to a variety of economic and social settings.

Original languageEnglish
Article number105042
JournalJournal of Economic Theory
Volume188
DOIs
StatePublished - Jul 2020

Keywords

  • Convexity
  • Envy-free
  • General equilibrium
  • Social norms
  • Y-equilibrium

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