INCOMPLETE SOCIAL CONTRACTS
By Philippe Aghion, Patrick Bolton. 2003
134 citations recorded by the source corpus.
There is a long normative ‘Social Contract’ tradition that attempts to characterize ex-post income inequalities that are agreeable to all ‘behind a veil of ignorance.’ This paper takes a similar normative approach to characterize social decision-making procedures. It is shown that quite generally some form of majority-voting is preferred to unanimity ‘behind a veil of ignorance’ whenever society faces deadweight costs in making compensating transfers. Deviations from unanimity (or ex-post Pareto optimality) are ex-ante efficient to the extent that they economize on costly compensating transfers. Put another way, the optimal decision rule trades off the benefits of minority protection and those from greater flexibility. (JEL: H11, G33, G34, D63, P16, P48)
Subfields: Economics and Econometrics, Gender Studies
View Paper: https://www.semanticscholar.org/paper/7f89e101d73811cb6ec7ba2cd57e556c910f6ca1
How researchers see this paper
The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.
In Economics and Econometrics
- A. Alesina
- Guido Tabellini
- Philippe Aghion
- Francesco Trebbi
- Massimo Morelli
- Daron Acemoglu
- Elias Papaioannou
- Torsten Persson
In Gender Studies
- Philippe Aghion
- Guido Tabellini
- Francesco Trebbi
- A. Alesina
- Elvire Guillaud
- Claudia Senik
- Kenneth F. Scheve
- D. Stasavage
Citations in the corpus
- Legislative Bargaining with Reconsideration (2011, unknown): “Observe that the last weak inequality constraint on x2 must be binding, and this constraint also guarantees that x2 0:We then solve this transformed maximization problem (4) over a continuous policy space, ignoring the second last inequality constraint.”
- Endogenous Political Institutions (2004, methodology): “In Table 3 the effect of all measures of fragmentation is strong and highly significant if we exclude income from the specification (columns (1)-(8)), even after employing a wide range of controls.”
- Self Enforcing Voting in International Organizations (2006, background): “In particular, each of the N players receives a 6Also Aghion and Bolton [1] and Guttman [13] argue that, in a veil-of-ignorance setting with perfect enforcement, majority generally dominates unanimity from the standpoint of ex-ante efficiency.”
- Bureaucrats or Politicians? Part II: Multiple Policy Tasks (2008, background): “16 A related structure of contract incompleteness also underlies the models of Constitutional choice by Aghion and Bolton (2003), Aghion, Alesina, and Trebbi (2004) and Trebbi et al. (2005).”