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Nagative Externalities and Sen's Liberalism Theorem

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Abstract

Sen’s seminal, negative theorem about minimal liberalism has had a profound effect on economics, philosophy, and the social sciences. To address concerns raised by his result, we show how Sen’s assumptions must be modified to obtain positive conclusions; e.g., one resolution allows an agent to be decisive only if his choice does not impose “strong negative externalities” on others. We also uncover an alternative interpretation of Sen’s societal cycles: beyond describing the rights of individuals to choose, the cycles identify when these choices impose difficulties on others. Other ways to address Sen’s difficulties come from game theory.



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