Determinación del porcentaje de sales solubles

1.1 The prima facie case for the market

On the distinction between normative and positive questions, see:

Friedman, M., 1953. The methodology of positive economics. In Essays in Positive Eco-nomics. University of Chicago Press, Chicago. Reprinted in D. M. Hausman (Ed.), 1994. The Philosophy of Economics. Cambridge University Press, New York, pp. 180–

213.

Writings on Adam Smith’s ideas (1759, 1776) include Reisman (1975) and Evensky (2005).

The “invisible hand” has become part of the folklore of economics. Our description of the invisible hand has relied on this folklore. Grampp (2000) provides a qualified account of the meaning of the invisible hand.

Grampp, W. D., 2000. What did Smith mean by the invisible hand? Journal of Political Economy 108:441–65.

Evensky, J., 2005. Adam Smith’s Moral Philosophy: A Historical and Contemporary Per-spective on Markets, Law, Ethics and Culture. Cambridge University Press, New York.

Reisman, D. A., 1975. Adam Smith’s Sociological Economics. Croon Helm, London;

Barnes & Noble, New York.

Smith, A., 1759/1976. The Theory of Moral Sentiments. Oxford University Press, Oxford.

Smith, A., 1776/1937. An Enquiry into the Nature and Causes of the Wealth of Nations.

E. Cannan (Ed.), Modern Library Edition. Random House, New York.

The role of marginal benefit in valuation and the solution to the water–diamond paradox were set out by Jevons (1871).

Jevons, W. S., 1871/1957. The Theory of Political Economy (5th edition). Kelley and Millman, New York.

The measurement of total benefit that we have used is also called consumer surplus and was introduced by Dupuit (1844/1969); see Houghton (1958). On the accuracy of consumer surplus as a measure of benefit, see Willig (1976). For elaboration, see Mishan and Quah (2007).

Dupuit, J., 1844/1969. On the measurement of the utility of public works. In K. J. Arrow and T. Scitovsky (Eds.), Readings in Welfare Economics. Irwin, Homewood IL, pp. 255–

83.

Houghton, R. W., 1958. A note on the early history of consumer surplus. Economica 25:49–57.

Mishan, E. J. and E. Quah, 2007. Cost-Benefit Analysis. Routledge, Abington U.K., and New York.

Willig, R. D., 1976. Consumer’s surplus without apology. American Economic Review 66:589–97.

On market inefficiency and monopoly, see:

Harberger, A. C., 1954. Monopoly and resource allocation. American Economic Review 44:77–87.

On the definition and attributes of barriers to entry, see:

Demsetz, H., 1982. Barriers to entry. American Economic Review 72:47–57.

1.2 Efficiency and social justice

On Pareto efficiency and compensation, see Kaldor (1939) and Hicks (1939). Kemp and Pezanis-Christou (1999) described Pareto’s view of compensation: Pareto (1894) viewed a government agency as compensating losers from change and distributing surplus benefits among the population.

Hicks, J. R., 1939. The foundations of welfare economics. Economic Journal 49:696–

712.

Kaldor, N., 1939. Welfare propositions of economics and interpersonal comparisons of utility. Economic Journal 49:549–52.

Kemp, M. C. and P. Pezanis-Christou, 1999. Pareto’s compensation principle. Social Choice and Welfare 16:441–4.

Pareto, V., 1894. Il massimo di utilit `a dato dalla libera concorrenza. Giornale degli Economisti 9:48–66.

The quote on the natural right of possession by John Stuart Mill (1806–73) was from:

Mill, J. S., 1848/1909. Principles of Political Economy (7th edition). W. J. Ashley (Ed.).

Longmans, Green, and Co., London.

Results reported of the experiments showing public preference for avoiding reliance on markets are from Kahneman, Knetsch, and Thaler (1986) and Frey and Pommerehne (1993). Kirchg ¨assner (2005) reviewed evidence comparing views of the public at large and economists on efficiency and social justice.

Frey, B. S. and W. W. Pommerehne, 1993. On the fairness of pricing: An empirical survey among the general population. Journal of Economic Behavior and Organization 20:295–

307.

Kahneman, D., J. L. Knetsch, and R. Thaler, 1986. Fairness as a constraint on profit seek-ing. American Economic Review 76:728–41.

Kirchg ¨assner, G., 2005. (Why) are economists different? European Journal of Political Economy 21:543–62.

Mui (1995) described how envy affects preferences and economic behavior. Konrad (2004) described the symbiotic relationship between envious people and altruists.

Konrad, K. A., 2004. Altruism and envy in contests: An evolutionarily stable symbiosis.

Social Choice and Welfare 22:479–90.

Mui, V.-L., 1995. The economics of envy. Journal of Economic Behavior and Organization 26:311–36.

On expressive voting, see:

Brennan, G. and J. M. Buchanan, 1984. Voter choice: Evaluating political alternatives.

American Behavioral Scientist 28:185–201.

Brennan, G. and A. Hamlin, 2000. Democratic Devices and Desires. Cambridge University Press, Cambridge U.K.

Glazer, A., 2008. Voting to anger and to please others. Public Choice 134:247–54.

On market behavior and voting, see:

Buchanan, J. M., 1954. Individual choice in voting and the market. Journal of Political Economy 62:334–43.

1.3 The rule of law

Demsetz (1967) described the emergence of property rights. The role of property rights in facilitating financial and insurance markets was emphasized by de Soto (2000). Frey and Buhofer (1988) described property rights to prisoners.

de Soto, H., 2000. The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else. Basic Books, New York.

Demsetz, H., 1967. Toward a theory of property rights. American Economic Review 57:347–59.

Frey, B. S. and H. Buhofer, 1988. Prisoners and property rights. Journal of Law and Eco-nomics 31:19–46.

The idea of Nash equilibrium appeared in Cournot (1838) and Nash (1951). On subgame perfection in extensive form games, see Selten (1975).

Cournot, A., 1838. Recherches sur les principes mathematiques de la theorie des richesses.

English edition: N. Bacon (Ed.), 1897. Researches into the Mathematical Principles of the Theory of Wealth. Macmillan, London.

Nash, J. F., 1951. Non-cooperative games. Annals of Mathematics 54:286–95.

Selten, R., 1975. Re-examination of the perfectness concept for equilibrium points in ex-tensive games. International Journal of Game Theory 4:25–55.

Nietzsche’s writings include Nietzsche (1886/1997). The game describing interaction between the weak and the strong in the absence of the rule of law is based on Hillman (2004). The distinction between stationary and roving bandits was made by Olson; see, for example, Olson (2000). Dixit (2004) described the role of the law in economic activity.

Moselle and Polak (2001) described the use of government for predation.

Dixit, A. K., 2004. Lawlessness and Economics: Alternative Modes of Governance. Prince-ton University Press, PrincePrince-ton NJ.

Hillman, A. L., 2004. Nietzschean development failures. Public Choice 119:263–80.

Moselle, B. and B. Polak, 2001. A model of a predatory state. Journal of Law, Economics, and Organization 17:1–33.

Nietzsche, F., 1886/1997. Beyond Good and Evil: Prelude to a Philosophy of the Future.

Dover Publications, New York.

Olson, M., 2000. Power and Prosperity. Basic Books, New York.

Feld and Voigt (2003) provided evidence on economic consequences of judicial systems.

Feld, L. and S. Voigt, 2003. Economic growth and judicial independence: Cross-country evidence using a new set of indicators. European Journal of Political Economy 19:497–

527.

Supplement S1A: Market efficiency in general equilibrium

An extensive literature presents proofs of the efficiency of competitive markets. Ques-tions studied include whether equilibrium exists and how preferred equilibrium is to be identified when there are multiple equilibria. The efficiency gains from international trade through comparative advantage were noted by Ricardo (1817/1951). On Pareto efficiency of free trade, see Samuelson (1939). On compensation and the gains from trade, see Kemp (1962). On political economy of departure from free trade, see Hillman (1989/2001).

Hillman, A. L., 1989. The Political Economy of Protection. Harwood Academic Publishers, Chur, Switzerland. Reprinted 2001, Routledge, Abington U.K., and New York.

Kemp, M. C., 1962. The gains from international trade. Economic Journal 72:803–19.

Ricardo, D., 1817. Principles of Political Economy and Taxation. Reprinted as volume I in P. Straffa (Ed.), 1951. The Works and Correspondence of David Ricardo. Cambridge University Press, Cambridge U.K.

Samuelson, P. A., 1939. The gains from international trade. Canadian Journal of Eco-nomics and Political Science 5:195–205.

Supplement S1B: The competitive market-adjustment mechanism

The Marshallian and Walrasian competitive market-adjustment mechanisms were described by Marshall (1938 and previous editions) and Walras (1896 and previous edi-tions, and 1954). See also Samuelson (1947) on market stability and the efficiency of mar-ket equilibria.

Marshall, A., 1938. The Principles of Economics (8th edition). Macmillan, London.

Samuelson, P. A., 1947. Foundations of Economic Analysis. Harvard University Press, Cambridge MA.

Walras, L., 1877, 1889, 1896. Elements d’economie politique pure, ou Theorie de la richesse sociale. Corbaz, Lausanne (1877, second edition); Rouge, Lausanne (1889 and 1896, third and fourth editions). In English, 1954. Theory of Pure Economics. Translated by W. Jaffe. Allen and Unwin, London.

Supplement S1C: Monopoly profits and social justice

On capitalization of monopoly profits, see:

Tullock, G., 1975. The transitional gains trap. Bell Journal of Economics 6:671–78.

Reprinted in J. M. Buchanan, R. Tollison, and G. Tullock (Eds.), 1980. Toward a Theory of the Rent-Seeking Society. Texas A&M University Press, College Station, pp. 211–21.

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