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On fairness of equilibria in economies with differential information

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  • Achille Basile
  • Maria Graziano
  • Marialaura Pesce

Abstract

The paper proposes a notion of fairness which overcomes the conflict arising between efficiency and the absence of envy in economies with uncertainty and asymmetrically informed agents. We do it in general economies which include, as particular cases, the main models of differential information economies, providing in this framework a natural competitive equilibrium notion which satisfies the fair criterion. The analysis is conducted allowing the presence of large traders, which may cause the lack of perfect competition. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Achille Basile & Maria Graziano & Marialaura Pesce, 2014. "On fairness of equilibria in economies with differential information," Theory and Decision, Springer, vol. 76(4), pages 573-599, April.
    • Handle: RePEc:kap:theord:v:76:y:2014:i:4:p:573-599
    DOI: 10.1007/s11238-013-9386-z
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    Cited by:

    1. Chiara Donnini & Marialaura Pesce, 2020. "Strict fairness of equilibria in asymmetric information economies and mixed markets," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 69(1), pages 107-124, February.
    2. Chiara Donnini & Marialaura Pesce, 2021. "Fairness and fuzzy coalitions," International Journal of Game Theory, Springer;Game Theory Society, vol. 50(4), pages 1033-1052, December.
    3. Chiara Donnini & Maria Laura Pesce, 2018. "Strict Fairness of Equilibria in Mixed and Asymmetric Information Economies," CSEF Working Papers 498, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    4. Marialaura Pesce, 2017. "Are Asymmetrically Informed Individuals Irremediably Envious?," Metroeconomica, Wiley Blackwell, vol. 68(1), pages 2-21, February.
    5. Chiara Donnini & Marialaura Pesce, 2023. "Fairness and formation rules of coalitions," International Journal of Economic Theory, The International Society for Economic Theory, vol. 19(4), pages 933-960, December.

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    More about this item

    Keywords

    Asymmetric information; Envy; Efficiency; Fairness; Mixed markets; Competitive equilibrium; C71; D51; D82;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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