Showing papers by "Hal R. Varian published in 1991"
Posted Content•
TL;DR: In this article, the authors describe a simple two-stage mechanism, the compensation mechanism, that implements efficient allocations in economic environments involving externalities, which can be used to solve a wide variety of externalities problems, including the standard problem of public goods provision.
Abstract: I describe a simple two-stage mechanism, the compensation mechanism, that implements efficient allocations in economic environments involving externalities. The compensation mechanism can be used to solve a wide variety of externalities problems, including the standard problem of public goods provision. It requires that that the agents know the magnitudes of the benefits and costs that they impose on other agents, but will also work with naive agents who follow a simple tatonnement.
224 citations
Posted Content•
TL;DR: In this paper, a goodness-of-fit measure for revealed preference tests is proposed to measure the degree to which an economic agent violates the model of utility maximization, and they calculate the violation indices for a 38 consumers and find that the observed choice behavior is very close to optimizing behavior.
Abstract: I describe a goodness-of-fit measure for revealed preference tests This index can be used to measure the degree to which an economic agent violates the model of utility maximization I calculate the violation indices for a 38 consumers and find that the observed choice behavior is very close to optimizing behavior
85 citations