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Participation and Solidarity in Redistribution Mechanisms

Listed author(s):
  • José-Manuel Giménez-Gómez

    ()

    (Universitat Rovira i Virgili, Dep. d’Economia and CREIP, Reus, Spain)

  • Josep E. Peris

    ()

    (Universitat d’Alacant, Dep. de Metodes Quantitatius i Teoria Econ`omica, Alacant, Spain)

Following Bossert (1995), we consider a model where personal income depends on two different characteristics: skills and effort. Luttens (2010) introduces claims that individuals have over aggregate income and that only depend on the effort they exert. Moreover, he proposes redistribution mechanisms in which solidarity is based on changes in a lower bound on what every individual deserves according to these claims: the so-called minimal rights (O’Neill 1982). A debatable consequence in one of Luttens’ mechanisms is that “the poorest individuals might up with a negative income” (Luttens 2010); that is, this mechanism does not satisfy participation, which turns out to be incompatible with claims feasibility, under Luttens’ assumptions. We present a new solidarity axiom that is compatible both with participation and claims feasibility, and we provide a mechanism satisfying these properties and our new additive solidarity axiom. Moreover, our mechanism satisfies additional properties, as priority, or re spect of minimal rights.

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Article provided by Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies in its journal Czech Economic Review.

Volume (Year): 9 (2015)
Issue (Month): 1 (October)
Pages: 036-048

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Handle: RePEc:fau:aucocz:au2015_036
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  1. Bertil Tungodden, 2005. "Responsibility and redistribution: The case of first best taxation," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 24(1), pages 33-44, 06.
  2. Bossert, W., 1993. "Redistribution Mechanisms Based on Individual Characteristics," Working Papers 9307, University of Waterloo, Department of Economics.
  3. Iñigo Iturbe Ormaetxe, 1995. "Redistribution And Individual Characteristics," Working Papers. Serie AD 1995-19, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  4. Elisha A. Pazner & David Schmeidler, 1978. "Egalitarian Equivalent Allocations: A New Concept of Economic Equity," The Quarterly Journal of Economics, Oxford University Press, vol. 92(4), pages 671-687.
  5. Elisha A. Pazner & David Schmeidler, 1974. "A Difficulty in the Concept of Fairness," Review of Economic Studies, Oxford University Press, vol. 41(3), pages 441-443.
  6. Fleurbaey, Marc, 2008. "Fairness, Responsibility, and Welfare," OUP Catalogue, Oxford University Press, number 9780199215911.
  7. Thomson, William, 2003. "Axiomatic and game-theoretic analysis of bankruptcy and taxation problems: a survey," Mathematical Social Sciences, Elsevier, vol. 45(3), pages 249-297, July.
  8. Varian, Hal R., 1974. "Equity, envy, and efficiency," Journal of Economic Theory, Elsevier, vol. 9(1), pages 63-91, September.
  9. Marc Fleurbaey & Walter Bossert, 1996. "Redistribution and compensation (*)," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 13(3), pages 343-355.
  10. Roland Luttens, 2010. "Minimal rights based solidarity," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 34(1), pages 47-64, January.
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