Transfer Paradox in a Stable Equilibrium

Dubey, Ram Sewak; Kang, Minwook

doi:10.2139/ssrn.3144038

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Transfer Paradox in a Stable Equilibrium

Dubey, R.S. & Kang, M. Econ Theory Bull (2018), DOI: 10.1007/s40505-018-0158-3

10 Pages Posted: 19 Mar 2018 Last revised: 15 Jun 2021

See all articles by Ram Sewak Dubey

Ram Sewak Dubey

Montclair State University - School of Business

Minwook Kang

Nanyang Technological University (NTU) - Division of Economics

Date Written: October 15, 2018

Abstract

The transfer paradox describes the situation in which transfers of initial endowments within competitive market make the donor better off and (or) the recipient worse off.
Advantageous redistribution, strong transfer paradox, and Chichilnisky paradox are the three cases of the transfer paradox in a stable equilibrium, wherein each case produces a different welfare outcome.
This paper shows that the three paradoxes are concretely related by applying Kaldor welfare measure.

Keywords: Advantageous Redistribution, Chichilnisky Paradox, Strong Paradox

JEL Classification: D50, F20

Suggested Citation: Suggested Citation

Dubey, Ram Sewak and Kang, Minwook, Transfer Paradox in a Stable Equilibrium (October 15, 2018). Dubey, R.S. & Kang, M. Econ Theory Bull (2018), DOI: 10.1007/s40505-018-0158-3, Available at SSRN: https://ssrn.com/abstract=3144038 or http://dx.doi.org/10.2139/ssrn.3144038