Gains from trade

Chambers, C. P. and Hayashi, T. (2017) Gains from trade. International Economic Review, 58(3), pp. 923-942. (doi: 10.1111/iere.12240)

Abstract

In a social choice context, we ask whether there exists a rule in which nobody loses under trade liberalization. We consider a resource allocation problem in which the traded commodities vary. We propose an axiom stating that enlarging the set of tradable commodities hurts nobody. We show that if a rule satisfies this axiom, together with an allocative efficiency axiom and an institutional constraint axiom stating that only preferences over tradable commodities matter, gains from trade can be given to only one individual in the first step of liberalization.

• Item Type: Articles
• Status: Published
• Refereed: Yes
• Glasgow Author(s) Enlighten ID: Hayashi, Professor Takashi
• Authors: Chambers, C. P., and Hayashi, T.
• College/School: College of Social Sciences > Adam Smith Business School > Economics
• Journal Name: International Economic Review
• Publisher: Wiley
• ISSN: 0020-6598
• ISSN (Online): 1468-2354
• Published Online: 25 August 2017
• Copyright Holders: Copyright © 2017 Economic Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association
• First Published: First published in International Economic Review 58(3): 923942
• Publisher Policy: Reproduced in accordance with the copyright policy of the publisher