Economics 10a Lecture Notes - Lecture 6: Voting Paradox, Online Advertising, Market Failure
21 Mar 2016
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Ed prescott"s hypothesis: taxes tax rates in europe are much higher than tax rates in the. United sates there is a good inverse correlation between tax rate and number of hours worked. Alesina-glaeser hypothesis: unions negotiate shorter workweeks and more holidays this is more the goal of european unions. In the us, 18% of workers are covered by collective bargaining this percentage is higher in european countries. Obama"s top antitrust official this week plans to restore an aggressive enforcement policy big change from bush"s administration. We can ask the same questions about markets: political economy, the condorcet paradox example of political economy. In pairwise majority voting, a beats b, b beats c, c beats a. Majority voting is not transitive: arrow"s impossibility theorem: assumptions, minimal axioms. Unanimity: if everyone prefers a to b, then a should beat b. Transitivity: if a beats b, and b beats c, then a should beat c.
