Are you assuming your utility function for Xs and Ys is linear?
If X is "houses" and Y is "cars", and someone starts with one of each, how many people would gain utility from trading their only house for more cars or their only car for more houses?
Comment author:Philo
04 June 2009 06:02:58PM
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I'd trade my car for another house: virtually any house would be worth more than my old car; I could sell the house and buy a better car, with something left over!
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Are you assuming your utility function for Xs and Ys is linear?
If X is "houses" and Y is "cars", and someone starts with one of each, how many people would gain utility from trading their only house for more cars or their only car for more houses?
I'd trade my car for another house: virtually any house would be worth more than my old car; I could sell the house and buy a better car, with something left over!