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Inequality preserving rationing

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  • Hougaard, Jens Leth
  • Osterdal, Lars Peter

Abstract

The present paper considers rationing problems interpreted as e.g. bankruptcy problems or taxation problems. We demonstrate that among the continuous and order-preserving rationing methods, theproportional method is the only rationing method that preserves inequality in both gains and losses.
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Suggested Citation

  • Hougaard, Jens Leth & Osterdal, Lars Peter, 2005. "Inequality preserving rationing," Economics Letters, Elsevier, vol. 87(3), pages 355-360, June.
    • Handle: RePEc:eee:ecolet:v:87:y:2005:i:3:p:355-360
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    2. H. Peyton Young, 1987. "On Dividing an Amount According to Individual Claims or Liabilities," Mathematics of Operations Research, INFORMS, vol. 12(3), pages 398-414, August.
    3. 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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    6. Biung-Ghi Ju, 2003. "Manipulation via merging and splitting in claims problems," Review of Economic Design, Springer;Society for Economic Design, vol. 8(2), pages 205-215, October.
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    Cited by:

    1. Emin Karagözoğlu, 2014. "A noncooperative approach to bankruptcy problems with an endogenous estate," Annals of Operations Research, Springer, vol. 217(1), pages 299-318, June.
    2. Kasajima, Yoichi & Velez, Rodrigo A., 2010. "Non-proportional inequality preservation in gains and losses," Journal of Mathematical Economics, Elsevier, vol. 46(6), pages 1079-1092, November.
    3. Satya R. Chakravarty & Palash Sarkar, 2022. "Inequality minimising subsidy and taxation," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 10(1), pages 53-67, May.
    4. Kristof Bosmans & Erik Schokkaert, 2009. "Equality preference in the claims problem: a questionnaire study of cuts in earnings and pensions," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 33(4), pages 533-557, November.
    5. José-Manuel Giménez-Gómez & M. Carmen Marco-Gil & Juan-Francisco Sánchez-García, 2022. "New empirical insights into conflicting claims problems," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 13(4), pages 709-738, December.
    6. Thomson, William, 2015. "Axiomatic and game-theoretic analysis of bankruptcy and taxation problems: An update," Mathematical Social Sciences, Elsevier, vol. 74(C), pages 41-59.
    7. William Thomson, 2012. "Lorenz rankings of rules for the adjudication of conflicting claims," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 50(3), pages 547-569, August.
    8. Yoichi Kasajima & Rodrigo Velez, 2011. "Reflecting inequality of claims in gains and losses," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 46(2), pages 283-295, February.
    9. Karagozoglu, E., 2008. "Distributive concerns in the bankruptcy problem with an endogenous estate," Research Memorandum 032, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    10. Miguel Ángel Mirás Calvo & Iago Núñez Lugilde & Carmen Quinteiro Sandomingo & Estela Sánchez-Rodríguez, 2023. "Deviation from proportionality and Lorenz-domination for claims problems," Review of Economic Design, Springer;Society for Economic Design, vol. 27(2), pages 439-467, June.

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    More about this item

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies

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