Share the Gain, Share the Pain? Almost Transferable Utility, Changes in Production Possibilities and Bargaining Solutions
AbstractWe consider an n-person economy in which efficiency is independent of distribution but the cardinal properties of the agents’ utility functions preclude transferable utility (a property we call “Almost TU”). We show that Almost TU is a necessary and sufficient condition for all agents to either benefit jointly or suffer jointly with any change in production possibilities under well-behaved generalized utilitarian bargaining solutions (of which the Nash Bargaining and the utilitarian solutions are special cases). We apply the result to household decision-making in the context of the Rotten Kid Theorem and in evaluating a change in family taxation.
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Bibliographic InfoPaper provided by Department of Economics, University of Victoria in its series Department Discussion Papers with number 0903.
Length: 23 pages
Date of creation: 22 Aug 2009
Date of revision:
Note: ISSN 1914-2838
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Postal: PO Box 1700, STN CSC, Victoria, BC, Canada, V8W 2Y2
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Axiomatic bargaining; Solidarity; Transferable utility; Family taxation; Rotten Kid Theorem;
Other versions of this item:
- Gugl, Elisabeth & Leroux, Justin, 2011. "Share the gain, share the pain? Almost transferable utility, changes in production possibilities, and bargaining solutions," Mathematical Social Sciences, Elsevier, vol. 62(3), pages 133-143.
- Elisabeth Gugl & Justin Leroux, 2009. "Share the Gain, Share the Pain? Almost Transferable Utility, changes in production possibilities, and bargaining solutions," Cahiers de recherche 09-05, HEC Montréal, Institut d'économie appliquée.
- Elisabeth Gugl & Justin Leroux, 2009. "Share the Gain, Share the Pain? Almost Transferable Utility, Changes in Production Possibilities, and Bargaining Solutions," Cahiers de recherche 0938, CIRPEE.
- Elisabeth Gugl, 2007. "Share the Gain, Share the Pain? Almost Transferable Utility, Changes in Production Possibilities, and Bargaining Solutions," Department Discussion Papers 0705, Department of Economics, University of Victoria.
- C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
- D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-09-05 (All new papers)
- NEP-GTH-2009-09-05 (Game Theory)
- NEP-UPT-2009-09-05 (Utility Models & Prospect Theory)
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