The responsibility criterion:Consumer sovereignty without the assumption of coherent preferences

Sugden, R. (2003) The responsibility criterion:Consumer sovereignty without the assumption of coherent preferences. Working Paper - Centre for Social and Economic Research on the Global Environment (1). pp. 1-24. ISSN 0967-8875

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Abstract

This paper proposes a formulation of consumer sovereignty, for use in normative economics, which does not presuppose individuals' preferences to be coherent. The fundamental intuition, that opportunity and responsibility have moral value, is formalised as a responsibility criterion for assessing opportunities in an economic system. A model of an exchange economy is presented, in which rational arbitrageurs compete to make profits by trading with non-rational consumers. In equilibrium, this economy satisfies the responsibility criterion. One interpretation of this result is that, in a competitive environment, the overall effects of money pumps are benign, even if individuals' preferences are persistently incoherent.

Item Type: Article
Uncontrolled Keywords: consumer sovereignty,money pump,opportunity,responsibility
Faculty \ School: Faculty of Social Sciences > School of Economics
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Depositing User: Pure Connector
Date Deposited: 22 Nov 2013 13:47
Last Modified: 06 Nov 2018 15:40
URI: https://ueaeprints.uea.ac.uk/id/eprint/44551
DOI:

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