Is the Pareto optimality of matching mechanisms robust to the introduction of boundedly rational behavior? To address this question I define a restrictive and a permissive notion of Pareto optimality and consider the large set of hierarchical exchange mechanisms which contains serial dictatorship as well as Gale’s top trading cycles. Fix a housing problem with boundedly rational agents and a hi...

This paper analyzes the notion of a minimal belief change that incorporates new information. I apply the fundamental decisiontheoretic principle of Pareto-optimality to derive a notion of minimal belief change, for two different representations of belief: First, for beliefs represented by a theory–a deductively closed set of sentences or propositions–and second for beliefs represented by an axi...

We consider Pareto optimal matchings as a means of coping with instances of the Stable Roommates problem (SR) that do not admit a stable matching. Given an instance I of SR, we show that the problem of finding a maximum Pareto optimal matching is solvable in O( √ nα(m,n)m log n) time, where n is the number of agents and m is the total length of the preference lists in I. By contrast we prove th...

We study Pareto optimal matchings in the context of house allocation problems. We present an O( √ nm) algorithm, based on Gale’s Top Trading Cycles Method, for finding a maximum cardinality Pareto optimal matching, where n is the number of agents and m is the total length of the preference lists. By contrast, we show that the problem of finding a minimum cardinality Pareto optimal matching is N...

We consider a society confronting the decision of accepting or rejecting a list of (at least two) proposals. Assuming separability of preferences, we show the impossibility of guaranteeing Pareto optimal outcomes through anonymous referendum voting, except for the case of an odd number of voters confronting precisely two proposals. In this special case, majority voting is the only anonymous soc...

In treatments of Monopolistic Competition, Edward Chamberlin and Joan Robinson are usually credited with simultaneously and independently developing the theory of monopolistic or imperfect competition. While their contributions were indeed simultaneously developed, it is inappropriate to treat them as having duplicated each other‟s efforts. Yet it has become customary in many treatments to rega...

In this paper we will describe a framework that allows us to connect the problem of hedging a portfolio in finance to the existence of Pareto optimal allocations in economics. We will show the solvability of both problems is equivalent to the No Good Deals assumption. We will then analyze the case of co-monotone additive monetary utility functions and risk measures.