Econometrica: Nov 1976, Volume 44, Issue 6

The Welfare Loss from Price Distortions<1253:TWLFPD>2.0.CO;2-X
p. 1253-1257

Trout Rader

We generalize to directionally dense but otherwise arbitrary production the Foster-Sonneschein theorem that increases in price distortion reduce consumer welfare. No convexity assumptions appear as in another generalization due to Kawamata. The many consumer case is considered but found to be problematic.

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