A unanimous decision rule is equivalent to market exchange in terms of efficiency.

Question

Quizplus · Accepted Answer

A unanimous decision rule, while ensuring that all members of a group agree on a decision, can lead to inefficiencies due to the difficulty in achieving unanimity and the potential for strategic behavior by individuals. Market exchange, on the other hand, is considered efficient under certain conditions (e.g., perfect competition) because it allows for voluntary trades that reflect individuals' preferences and valuations, leading to an allocation of resources that maximizes total surplus.

A Unanimous Decision Rule Is Equivalent to Market Exchange in Terms