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Fair Production and Allocation of an Excludable Nonrival Good

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  • François Maniquet
  • Yves Sprumont

Abstract

We study fairness in economies with one private good and one partially excludable nonrival good. A social ordering function determines for each profile of preferences an ordering of all conceivable allocations. We propose the following Free Lunch Aversion condition: if the private good contributions of two agents consuming the same quantity of the nonrival good have opposite signs, reducing that gap improves social welfare. This condition, combined with the more standard requirements of Unanimous Indifference and Responsiveness, delivers a form of welfare egalitarianism in which an agent's welfare is measured by the quantity of the nonrival good that, consumed at no cost, would leave her indifferent to the bundle she is assigned. Copyright The Econometric Society 2004.

Suggested Citation

  • François Maniquet & Yves Sprumont, 2004. "Fair Production and Allocation of an Excludable Nonrival Good," Econometrica, Econometric Society, vol. 72(2), pages 627-640, March.
    • Handle: RePEc:ecm:emetrp:v:72:y:2004:i:2:p:627-640
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    File URL: http://hdl.handle.net/10.1111/j.1468-0262.2004.00503.x
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    Cited by:

    1. Wolfgang Buchholz & Wolfgang Peters, 2008. "Equal sacrifice and fair burden-sharing in a public goods economy," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 15(4), pages 415-429, August.
    2. Rafael Treibich, 2019. "Welfare egalitarianism with other-regarding preferences," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 52(1), pages 1-28, January.
    3. Giacomo, VALETTA, 2007. "A fair solution to the compensation problem," Discussion Papers (ECON - Département des Sciences Economiques) 2007038, Université catholique de Louvain, Département des Sciences Economiques.
    4. Maniquet, François & Sprumont, Yves, 2010. "Sharing the cost of a public good: An incentive-constrained axiomatic approach," Games and Economic Behavior, Elsevier, vol. 68(1), pages 275-302, January.
    5. GIRARDI, Daniele & GRAU, Nicolas & VENEZIANI, Roberto & YOSHIHARA, Naoki, 2025. "Exploitation : Theory and Empirics," Discussion Paper Series 765, Institute of Economic Research, Hitotsubashi University.
    6. Marc Fleurbaey & Yves Sprumont, 2009. "Sharing the Cost of a Public Good without Subsidies," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 11(1), pages 1-8, February.
    7. Marc Fleurbaey & François Maniquet, 2006. "Fair Income Tax," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 73(1), pages 55-83.
    8. SPRUMONT, Yves, 2009. "Relative Egalitarianism and Related Criteria," Cahiers de recherche 2009-02, Universite de Montreal, Departement de sciences economiques.
    9. Paolo Giovanni Piacquadio, 2017. "A Fairness Justification of Utilitarianism," Econometrica, Econometric Society, vol. 85, pages 1261-1276, July.
    10. Fleurbaey, Marc & Leroux, Marie-Louise & Ponthiere, Gregory, 2014. "Compensating the dead," Journal of Mathematical Economics, Elsevier, vol. 51(C), pages 28-41.
    11. Marc Fleurbaey & Guillaume Gaulier, 2009. "International Comparisons of Living Standards by Equivalent Incomes," Scandinavian Journal of Economics, Wiley Blackwell, vol. 111(3), pages 597-624, September.
    12. Fleurbaey, Marc, 2006. "Is commodity taxation unfair?," Journal of Public Economics, Elsevier, vol. 90(10-11), pages 1765-1787, November.
    13. Marc Fleurbaey, 2009. "Beyond GDP: The Quest for a Measure of Social Welfare," Journal of Economic Literature, American Economic Association, vol. 47(4), pages 1029-1075, December.
    14. MANIQUET, François, 2014. "Social ordering functions," LIDAM Discussion Papers CORE 2014051, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    15. Marc Fleurbaey & Marie-Louise Leroux & Grégory Ponthière, 2010. "Compensating the dead? Yes we can!," PSE Working Papers halshs-00564934, HAL.
    16. Maniquet, Francois & Sprumont, Yves, 2005. "Welfare egalitarianism in non-rival environments," Journal of Economic Theory, Elsevier, vol. 120(2), pages 155-174, February.
    17. Marc Fleurbaey, 2003. "Social Welfare, Priority to the Worst-Off And the Dimensions of Individual Well-Being," IDEP Working Papers 0312, Institut d'economie publique (IDEP), Marseille, France.
    18. Rajat Deb & Tae Seo, 2010. "Strategy-proofness and public good provision using referenda based on unequal cost sharing," International Journal of Game Theory, Springer;Game Theory Society, vol. 39(1), pages 223-236, March.
    19. Giacomo Valletta, 2009. "A fair solution to the compensation problem," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 32(3), pages 455-478, March.
    20. MANIQUET, François & NEUMANN, Dirk, 2016. "Well-Being, Poverty and Labor Income Taxation: Theory and Application to Europe and the U.S," LIDAM Discussion Papers CORE 2016029, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    21. Fleurbaey, Marc, 2007. "Two criteria for social decisions," Journal of Economic Theory, Elsevier, vol. 134(1), pages 421-447, May.
    22. repec:qeh:ophiwp:ophiwp020 is not listed on IDEAS
    23. repec:qeh:ophiwp:ophiwp025 is not listed on IDEAS

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