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Bilateral redistribution

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  • Chambers, Christopher P.
  • Moreno-Ternero, Juan D.

Abstract

We explore the implications of three basic and intuitive axioms for income redistribution problems: continuity, no transfer paradox and stability. The combination of the three axioms characterizes in the two-agent case a large family of rules, which we call threshold rules. For each level of total income in society, a threshold is considered for each agent. It is impossible for both agents to be below their respective thresholds. If an agent’s income is below the threshold, the difference is redistributed from the other agent; otherwise, the rule imposes laissez-faire.

Suggested Citation

  • Chambers, Christopher P. & Moreno-Ternero, Juan D., 2021. "Bilateral redistribution," Journal of Mathematical Economics, Elsevier, vol. 96(C).
    • Handle: RePEc:eee:mateco:v:96:y:2021:i:c:s030440682100080x
    DOI: 10.1016/j.jmateco.2021.102517
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    Cited by:

    1. Ricardo Martínez & Juan D. Moreno‐Ternero, 2024. "Redistribution with needs," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 26(1), February.
    2. Martínez, Ricardo & Moreno-Ternero, Juan D., 2022. "Laissez-faire or full redistribution?," Economics Letters, Elsevier, vol. 218(C).

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    More about this item

    Keywords

    Income redistribution; Axioms; Stability; Continuity; No transfer paradox;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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