The permissible and the forbidden

Michael Richter, Ariel Rubinstein

    Research output: Contribution to journalArticlepeer-review

    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 (US)
    Article number105042
    JournalJournal of Economic Theory
    Volume188
    DOIs
    StatePublished - Jul 2020

    Keywords

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

    ASJC Scopus subject areas

    • Economics and Econometrics

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