This textbook is Volume 1 of a two-volume set on the axiomatics of economic design. Its central argument is that economic institutions are not God-given: they are man-made. Their ultimate goal is to promote social welfare. The book describes the axiomatic approach to design. It consists in the formulation of criteria of desirability of solution mappings, and of the examination of their logical implications when imposed in various combinations. Its goal is to identify as precisely as possible the line that separates those combinations of desiderata that are compatible and those that are not. The end product of axiomatic work are menus of choices for practitioners to choose from when they have to make a decision.
The first volume offers pedagogical coverage of the axiomatic approach to economic design, in the form of answers to questions posed by a young person curious about it. It introduces readers to what motivates economic design. It continues with the mathematical representation of a class of allocation problems.
The bulk of the volume is to present structured inventories of the field of axioms, arranged by format first, and content next. These chapters are followed by a user's manual on the axiomatic method. Lastly, the volume discusses how economic design can be aided by other disciplines, in particular philosophy, mathematics, and computer science.
Author(s): William Thomson
Series: Studies in Choice and Welfare
Edition: 1
Publisher: Springer Nature Switzerland
Year: 2023
Language: English
Pages: xvi; 313
City: Cham
Tags: Economics and Finance; Social Choice/Welfare Economics/Public Choice/Political Economy; Industries; Economic Theory/Quantitative Economics/Mathematical Methods; Social Choice/Welfare Economics/Public Choice/Political Economy
Preface
Acknowledgments
Notation
Other Conventions
Contents
Part I Preliminaries
1 Introduction
1.1 On the Goals of Economic Design
1.2 On the Need to Go Beyond Markets
1.3 On the Approach to Be Followed
1.4 A Little Historical Background
1.5 Bibliographic Note
2 Abstract Social Choice Problems and Concrete Resource Allocation Problems
2.1 Ranking Versus Choosing
2.2 Abstract Versus Concrete Allocation Problems
2.3 Structured Versus Unstructured Models: What's the Difference?
2.4 Bibliographic Notes
3 Describing an Allocation Problem: A Checklist
3.1 Resources
3.2 Economic Agents and Their Preferences
3.3 Ownership, Claims, and Priorities
3.4 Putting Everything Together
3.5 Bibliographic Notes
Part II Axiom Types
4 Axiom Format
4.1 What's an Axiom?
4.2 Universal Versus Problem-Specific Axioms
4.3 Punctual Versus Relational Axioms
4.4 Pre-application Versus Post-application Axioms
4.5 Individual-Centric Versus Group-Centric Axioms
4.6 Self-regarding Versus Other-Regarding Axioms
4.7 Fixed-Population Versus Variable-Population Axioms
4.8 Monotonicity Versus Invariance Axioms
4.9 A Quick Summary
4.10 Bibliographic Notes
5 Axiom Content: Delineating Broad Categories
5.1 Normative and Strategic Axioms
5.2 Operational and Instrumental Axioms
5.3 Technical Axioms
5.4 A Quick Summary
5.5 Bibliographic Note
6 Axiom Content: Punctual Requirements on Welfare Distribution
6.1 Bounds
6.2 Interpersonal Comparisons of Assignments
6.3 When People Should Not Be Placed on the Same Footing
6.4 On the Lorenz Order and the Gini Coefficient
6.5 Do Punctual Fairness Requirements Always Amount to Equate Something? To Maximize Something?
6.6 A Quick Summary
6.7 Bibliographic Notes
7 Axiom Content: Solidarity Underlying Relational Requirements on Welfare Redistribution
7.1 A Basic Relational Axiom: Anonymity
7.2 Relational Axioms Pertaining to Individual Parameters
7.3 Solidarity as a Unifying Principle
7.4 Resource Monotonicity
7.5 Welfare-Dominance Under Preference-Replacement
7.6 Population Monotonicity
7.7 Consistency
7.8 When People Should Not Be Placed on the Same Footing: Order Preservation Under Parameter Variations
7.9 A Quick Summary
7.10 Bibliographic Notes
8 Axiom Content: Robustness to Choices of Perspective in Evaluating Changes
8.1 Invariance as Robustness
8.2 Additivity and Related Properties
8.3 Composition Properties
8.4 Separability
8.5 Consistency and Related Properties
8.6 Converse Consistency
8.7 A Quick Summary
8.8 Bibliographic Notes
9 Axiom Content: Robustness to Strategizing
9.1 Immunity to Misrepresentation of Private Knowledge
9.2 Immunity to Manipulation Through One's Control Over Resources
9.3 Assessing the Manipulability of Rules
9.4 Beyond Direct Revelation: Implementability Requirements
9.5 A Practical Question: Naming Things
9.6 A Quick Summary
9.7 Bibliographic Notes
Part III Working with Axioms
10 Parameterizing Axioms; Operators on Spaces of Rules
10.1 Choosing Among Axioms
10.2 Parameterizing Axioms
10.3 Operators on Spaces of Rules
10.4 Summarizing with Tables, Venn Diagrams, Diagrams of Arrows
10.5 Bibliographic Notes
11 Characterizations and Impossibilities
11.1 Axiomatic Characterizations: Definition and Purpose
11.2 On Characterization Proofs
11.3 On the Role of Domains in Characterizations
11.4 On the Independence of Axioms in a Characterization
11.5 Evaluating the Significance of Axiomatizations
11.6 Impossibility Theorems and Counterexamples
11.7 Challenges Faced When Conducting Axiomatic Work
11.8 Bibliographic Notes
12 Conducting Axiomatic Work: A User's Guide
13 Complements to the Axiomatic Method in Economic Design
13.1 Cooperative Game Theory and Economic Design
13.2 Non-cooperative Game Theory and Economic Design
13.3 Other Disciplines Helping Economic Design
13.4 What Have We Learned?
13.5 Bibliographic Notes
14 Appendix: Problem Types
Bibliography
Index
