This chapter discusses various technical constructions and philosophical interpretations of utility theory with a view of establishing its relevance to social ethics.

Properties of stochastic outcome functions are exploited to solve the moral hazard problem in teams under unobservable individual actions and different individual objectives. Two kinds of enforcement mechanisms are considered: Enforcement through utility transfers and enforcement through...

In a horizontal product differentiation model, we show conditions under which Cournot competition (which implies some form of price coordination) allows a larger number of firms to operate in the industry than Bertrand competition. In turn, total welfare is higher under Cournot than under...