ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Markets, Power and Social Norms

Markets, Power and Social Norms Kaushik Basu The fundamental theorem of welfare economics, which states that, given some conditions, individual selfishness can lead to social optimally, is one of the most misused theorems in economics. Many policies are justified by citing this theorem, or rather folklore versions of it. Several technical reasons as to why the price mechanism may fail to function efficiently are well known.

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