Indivisible units are randomly allocated among agents with a claim/demand on the resources. The available resources fall short of the sum of individual claims. The proportional method distributes units sequentially, and the probability of receiving a unit at any step is proportional to the unsatisfied claims. We characterize the family of probabilistic rationing methods meeting the three axioms Consistency, Lower and Upper Composition. It contains the proportional method, all deterministic fixed priority methods, and the priority compositions of proportional methods. The proportional method is the only fair method in the family.
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Paper provided by Rice University, Department of Economics in its series Working Papers with number
2000-02.
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Moulin, Herve, 2002.
"Axiomatic cost and surplus sharing,"
Handbook of Social Choice and Welfare,
in: K. J. Arrow & A. K. Sen & K. Suzumura (ed.), Handbook of Social Choice and Welfare, edition 1, volume 1, chapter 6, pages 289-357
Elsevier.
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