"The Law of Comparative
Advantage without Social Utility Functions"
forthcoming in Review of International Economics.
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paper. Alternatively, if you have
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This paper derives sufficient
conditions under which the Law of Comparative Advantage
and the General Law of Comparative Advantage are true
when the preferences of the trading countries may not be
represented by "well-behaved'' social utility
functions. It shows that in the neoclassical framework
with convex technologies, profit maximization and
Walras's Law, the laws of comparative advantage under a
natural trade are still valid if either the Law of Demand
or the Weak Axiom of Revealed Preference holds, or if
losers are compensated using lump-sum transfers or
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This page was last revised on January 24, 2000.