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Egalitarian Equivalence under Asymmetric Information

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  • Geoffroy de Clippel
  • David Pérez-Castrillo
  • David Wettstein

Abstract

We propose a definition of egalitarian equivalence that extends Pazner and Schmeidlers (1978) concept to environments with incomplete information. If every feasible allocation rule can be implemented by an incentive compatible mechanism (as, for instance, in the case of non-exclusive information), then interim egalitarian equivalence and interim incentive efficiency remain compatible, as they were under complete information. When incentive constraints are more restrictive, on the other hand, the two criteria may become incompatible.

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Bibliographic Info

Paper provided by Barcelona Graduate School of Economics in its series Working Papers with number 431.

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Date of creation: Feb 2010
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Handle: RePEc:bge:wpaper:431

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Keywords: Pareto Efficiency; Egalitarian Equivalence; Asymmetric Information;

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References

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  3. Kalai, Ehud, 1977. "Proportional Solutions to Bargaining Situations: Interpersonal Utility Comparisons," Econometrica, Econometric Society, vol. 45(7), pages 1623-30, October.
  4. Elisha A. Pazner & David Schmeidler, 1975. "Egalitarian Equivalent Allocations: A New Concept of Economic Equity," Discussion Papers 174, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  5. DE CLIPPEL, Geoffroy & MINELLI, Enrico, . "Two-person bargaining with verifiable information," CORE Discussion Papers RP -1733, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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Citations

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Cited by:
  1. Geoffroy de Clippel, 2010. "Copmment on Egalitarianism under Incomplete Information," Working Papers 2010-4, Brown University, Department of Economics.
  2. Yuan Ju, 2013. "Efficiency and compromise: a bid-offer–counteroffer mechanism with two players," International Journal of Game Theory, Springer, vol. 42(2), pages 501-520, May.

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