A robust theory of resource allocation

The theory of social choice introduced in 5, 6] is robust: it is completely independent of the choice of topology on spaces of preferences. This theory has been fruitful in linking diverse forms of resource allocation: it has been shown 17] that contractibility is necessary and sufficient for solving the social choice paradox; this condition is equivalent 11] to another — limited arbitrage — which is necessary and sufficient for the existence of a competitive equilibrium and the core of an economy 13, 14, 15, 16, 17]. The space of monotone preferences is contractible; as shown already in 6, 17] such spaces admit social choice rules. However, monotone preferences are of little interest in social choice theory because the essence of the social choice problem, such as Condorcet triples, rules out monotonicity.The author is Director, Program on Information and Resources, and Professor of Economics, Columbia University. 1994-5 Salinbemi Professor, University of Siena, Italy. Research support from NSF grants Nos. 92 16928 and from the Leif Johansen Award at the University of Oslo, Norway, are gratefully acknowledged.