Abstract
This paper reconsiders the Lipsey-Lancaster [4] theory of second best and formulates less restrictive sufficient conditions for the preservation of the usual first-order conditions for the non-deviant commodities. In particular, we derive a more general class of separable objective and constraint functions which yield the result that, even in the presence of a Lipsey-Lancaster constraint for deviant commodities, the usual Paretian optimum conditions for the non-deviants continue to be optimal. Consider the maximization problem: max F(x1, ..., xn)
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