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Fair and Efficient Lotteries over Indivisible Goods

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  • Basteck, Christian

Abstract

We study the problem of assigning indivisible goods to individuals where each is to receive one object. To guarantee fairness in the absence of monetary compensation, we consider random assignments and analyse various equity criteria for such lotteries. In particular, we find that sd-no-envy (as championed by the Probabilistic Serial) is incompatible with the sd-core from equal division. As an alternative, we present a Walrasian mechanism, whose outcomes are sd-efficient, group sd-envy-free, lie in the sd-core from equal division and satisfy the sd-equal-division-lower-bound.

Suggested Citation

  • Basteck, Christian, 2014. "Fair and Efficient Lotteries over Indivisible Goods," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100517, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc14:100517
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    References listed on IDEAS

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    1. Andreu Mas-Colell, 1992. "Equilibrium Theory with Possibly Satiated Preferences," Palgrave Macmillan Books, in: Mukul Majumdar (ed.), Equilibrium and Dynamics, chapter 9, pages 201-213, Palgrave Macmillan.
    2. Varian, Hal R., 1974. "Equity, envy, and efficiency," Journal of Economic Theory, Elsevier, vol. 9(1), pages 63-91, September.
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    More about this item

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General

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