3. Status and Indoctrination

In this chapter, the parameter which brings harmony is a commonly accepted public ordering on the set of alternatives. Its main interpretation is of a status ranking. Society restricts an agent's ability to replace the alternative he has. He can only move “down” to a “less prestigious” one, but not “up”.

The main equilibrium notion is a status equilibrium which is a public ordering and a feasible profile of choices such that no agent strictly prefers any weakly lower-status alternative than the one he is assigned to. As in a market, deviations are purely self-serving and contemplated without regard to feasibility.

We also study a variant, the initial status equilibrium, which operates on a model of an economy that is extended to include an initial profile. In the initial profile, each agent is assigned an alternative which he can always choose and which together with the public ordering determines his choice set. In an initial status equilibrium no agent strictly prefers any weakly lower-status alternative than the one he is assigned to initially.

The equilibrium concepts are discussed in abstract, ``welfare'' theorems are shown, and they are applied to a variety of examples.