Publications [#239225] of Edward Tower

Journal Articles

1. Gang, IN; Tower, E, The Stahl-Alexeev paradox: A note, Journal of Economic Theory, vol. 44 no. 1 (January, 1988), pp. 189-191, Elsevier BV, ISSN 0022-0531 [repository], [doi]
   (last updated on 2025/04/18)

   Abstract:
   We offer a simple proof of the paradox discovered by Stahl and Alexeev that the introduction of black markets in a fixed price economy with a rationing mechanism consisting of waiting line queues is not necessarily a Pareto improvement. We show that the paradoxical result arises from the fact that queue length is endogenous and illustrates the general principle that permitting an additional market may be undesirable in an economy which has other distortions. © 1988.