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Copyright

Michael Richter; Ariel Rubinstein;

Published On

2024-11-13

Page Range

pp. 65–92

Language

  • English

Print Length

28 pages

3. Status and Indoctrination

Chapter of: No Prices No Games!: Four Economic Models(pp. 65–92)
In this chapter, the parameter which brings harmony is a commonly accepted public ordering on the set of alternatives. Its main interpretation is of a status ranking. Society restricts an agent's ability to replace the alternative he has. He can only move “down” to a “less prestigious” one, but not “up”.
The main equilibrium notion is a status equilibrium which is a public ordering and a feasible profile of choices such that no agent strictly prefers any weakly lower-status alternative than the one he is assigned to. As in a market, deviations are purely self-serving and contemplated without regard to feasibility.
We also study a variant, the initial status equilibrium, which operates on a model of an economy that is extended to include an initial profile. In the initial profile, each agent is assigned an alternative which he can always choose and which together with the public ordering determines his choice set. In an initial status equilibrium no agent strictly prefers any weakly lower-status alternative than the one he is assigned to initially.
The equilibrium concepts are discussed in abstract, ``welfare'' theorems are shown, and they are applied to a variety of examples.

Contributors

Michael Richter

(author)
https://orcid.org/0000-0002-5220-9995

Michael Richter is a professor of Economics at Baruch College, City University of New York and Royal Holloway, University of London. He is a graduate of the University of Chicago (BS, Math) and New York University (PhD, Economics). His research interests are in microeconomic theory, particularly decision theory, general equilibrium, and search. He lives in New York, with his wife and two kids. For other works, the author’s website is: http://www.mrichter.co/

Ariel Rubinstein

(author)
Emeritus in School of Economics at Tel Aviv University
Professor of Economics at New York University
https://orcid.org/0000-0003-1574-2659
https://arielrubinstein.org/

Ariel Rubinstein was born in Jerusalem and received his PhD from the Hebrew University in Jerusalem in 1979. Has been a Professor at the Hebrew University and at Princeton and currently is a Professor (Emeritus) at Tel Aviv University and a Professor of Economics at New York University. He has served as the President of the Econometric Society (2004). He is a foreign honorary member of the American Academy of Arts and Sciences and the American Economic Association, an Elected Fellow of the Israeli Academy of Sciences and Elected Corresponding Fellow of the British Academy. His 7 books reflect his research interests: Bargaining and Markets (with M. Osborne) (1990), A Course in Game Theory (with M. Osborne) (1994), Modeling Bounded Rationality (1998), Economics and Language (2000), Lecture Notes in Microeconomics (2005) and Models of Microeconomic Theory (with M.Osborne) (2020). His book Economic Fables (2012) presents his general views about Economic Theory. He created and manages the Atlas of Cafes (where one can think). All his books and articles are accessed through his homepage https://arielrubinstein.tau.ac.il.