[The Social Rate of Discount and the Optimal Rate of Investment]: Further Comment

1964 ◽  
Vol 78 (2) ◽  
pp. 336 ◽  
Author(s):  
Robert C. Lind
Keyword(s):  
2021 ◽  
pp. 38-59
Author(s):  
Hervé Crès ◽  
Mich Tvede

The problem of collective decision-making arising from market failures is addressed using the democratic principle applied within the assembly of shareholders. A basic requirement is imposed (the Pareto principle): collective choices should not be at odds with the interests of all shareholders, as expressed by their preferences. This requirement puts bounds on what the collective can choose: it should remain within the set of averages of what the shareholders want. Further refining these bounds, a notion of political stability is proposed; it is defined with respect to (super) majority voting. One searches for the smallest rate of super majority for which a stable collective choice exists. This optimal rate is reviewed under classical assumptions from the social choice literature. It is shown how the dimensionality of the collective decision-making problem and the polarization of the electorate critically impact political stability, and hence the optimal rate of super majority.


1972 ◽  
pp. 136-156 ◽  
Author(s):  
Ajit K. Dasgupta ◽  
D. W. Pearce
Keyword(s):  

1970 ◽  
Vol 84 (3) ◽  
pp. 430 ◽  
Author(s):  
J. A. Seagraves
Keyword(s):  

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