The possibility of a Paretian Liberal : an experimental investigation

Keily, Tom. (2000). The possibility of a Paretian Liberal : an experimental investigation Honours Thesis, School of Economics, The University of Queensland.

       
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Author Keily, Tom.
Thesis Title The possibility of a Paretian Liberal : an experimental investigation
School, Centre or Institute School of Economics
Institution The University of Queensland
Publication date 2000
Thesis type Honours Thesis
Total pages 102
Language eng
Subjects 14 Economics
Formatted abstract This thesis concerns itself with the field of social choice theory generated by Nobel Laureate, A. K Sen's 1970 paper 'The Impossibility of a Paretian Liberal'. Sen's paper demonstrated that a minimalist rights structure based on classic liberal principles was incompatible with the concept of Pareto Optimality. This tension has, along with similar results by Kenneth Arrow and Allan Gibbard, come to be known as the Liberal paradox. In 1999 Martin Van Hees in a Journal of Economic Theory paper titled "Liberalism, Efficiency and Stability: Some Possibility results', questions Sen's minimalist conception of rights. Extending the game theoretic interpretation of the Liberal paradox, Van Hees modifies Sen's conception of rights and delivers two games that contain Pareto optimal Nash equilibria. However Pareto inferior Nash also exist. This thesis aims to test which of the equilibria is more likely in an experimental setting. An experiment modelling Sen's original result and both of Van Hees's results is developed and conducted with a group of 16 participants. The results offer weak support for Van Hees's claim that liberalism and Paretianism are compatible. However, this thesis ultimately concludes that Van Hees's proof for the existence of Pareto Optimal Nash equilibria, is perhaps a necessary, but by no means sufficient condition for a resolution to the paradox. Sen's original result is shown to still be potent and, for the mean time, insurmountable.

 
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Created: Mon, 29 Nov 2010, 12:22:43 EST by Muhammad Noman Ali on behalf of The University of Queensland Library