The equity-efficiency trade-off reconsidered
AbstractEnvy-free and Pareto optimal allocations never exist in large economies with production, if there is enough variation with respect to preferences and innate abilities of the agents. If distributional equity is given priority only second best envy-free allocations may be considered. Those allocations are characterised in finite and continuum economies. In continuum economies envy-free allocations are “type-egalitarian”, i.e. agents with the same preferences but different abilities obtain the same consumption-labour bundle. Regarding implementation envy-free allocations can only be implemented by a tax depending on labour and income. Copyright Springer-Verlag 2005
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Bibliographic InfoArticle provided by Springer in its journal Social Choice and Welfare.
Volume (Year): 24 (2005)
Issue (Month): 1 (08)
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Web page: http://link.springer.de/link/service/journals/00355/index.htm
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- Yukihiro Nishimura, 2008. "Envy Minimization in the Optimal Tax Context," Working Papers 1178, Queen's University, Department of Economics.
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