| The paper mainly talks about that the relation between game theory and equilibrium,the relation among the equilibrium,Economic efficiency and welfare economy and that is the importance of the two welfare economics theories.Social welfare and social choice issues have been concerned by many economists,the free rider of economic allocation with public goods and the incentive mechanism theory in equilibrium(that is the multiple applications of social choice theory and game theory).Equilibrium and Pareto effectiveness,in game theory,the personal voluntary promotion of public goods will lead to the scarce supply of it,etc.It introduces in detailed that the resources allocation is Pareto-optimal and the relevant knowledge of social welfare function. And market mechanism is effective to resource allocation,social welfare is the maximum.And then effective resource allocation can be realized through the allocation made by market mechanism to economic adjustment It shows us the condition to realize the Pareto-optimal through boundary analysis ways.Besides,this paper introduces some problems related to social welfare function and social utility function and compensation principle of social welfare and gives a form of social welfare function.The main points of this paper are as follows,to build a game model with public goods supply and explain that it is a continuous game which at least exists a pure strategy Nash equilibrium,to use reaction function ways to get equilibrium from the game is the Pareto-optimal,to point out the situation of public goods supply which is under Nash equilibrium results, to use social welfare function to infer the optimization Samuelson condition of Pareto,to use Cobb-Douglas function to make out that public goods supply under Nash equilibrium is less than social Pareto-optimal public goods supply,to point out that compensation principle of social welfare is impossible to be effective in the society which is provided with the game with public goods. |
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