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Coalitional fairness with participation rates

Author

Listed:
  • Achille Basile

    () (Università degli Studi di Napoli Federico II)

  • Maria Gabriella Graziano

    () (Università degli Studi di Napoli Federico II
    CSEF)

  • Ciro Tarantino

    () (Università degli Studi di Napoli Federico II)

Abstract

Abstract This paper investigates coalitional fairness in pure exchange economies with asymmetric information. We study allocations of resources which are immune from envy when comparisons take place between coalitions. The model allows negligible and non-negligible traders, partially informed about the true state of nature at the time of consumption, to exchange any number, possibly infinite, of commodities. Our analysis is based on the Aubin approach to coalitions and cooperation. Namely, on a notion of cooperation allowing traders to take part in one or more coalitions simultaneously, employing only shares of their endowments (participation rates). We introduce and study in detail the notion of coalition fairness with participation rates (or Aubin c-fairness) and show that flexibility in cooperation permits to recover the failure of fairness properties of equilibrium allocations. Our results provide applications to several market outcomes (ex-post core, fine core, ex-post competitive equilibria, rational expectations equilibria) and emphasize the consequences of the convexification effect due to participation rates for models with large traders and infinitely many commodities.

Suggested Citation

  • Achille Basile & Maria Gabriella Graziano & Ciro Tarantino, 2018. "Coalitional fairness with participation rates," Journal of Economics, Springer, vol. 123(2), pages 97-139, March.
  • Handle: RePEc:kap:jeczfn:v:123:y:2018:i:2:d:10.1007_s00712-017-0543-7
    DOI: 10.1007/s00712-017-0543-7
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    References listed on IDEAS

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    Cited by:

    1. Chiara Donnini & Maria Laura Pesce, 2019. "Strict Fairness of Equilibria in Mixed and Asymmetric Information Economies," CSEF Working Papers 528, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    2. Chiara Donnini & Maria Laura Pesce, 2018. "Strict Fairness of Equilibria in Mixed and Asymmetric Information Economies," CSEF Working Papers 498, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.

    More about this item

    Keywords

    Aubin coalitions; Fairness; Atomic measure space; Lyapunov convexity theorem; Infinite dimensional commodity space;

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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