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Compatibility of egalitarian equivalence and envy-freeness in a continuum-agent economy

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  • Susumu Cato

    (University of Tokyo)

Abstract

The purpose of this study is to investigate a relationship between egalitarian equivalence and envy-freeness in a continuum-agent economy, where tastes vary continuously across individuals. Under efficiency, the two criteria of equity are not compatible, except in the knife-edge case. In particular, when individual utility functions are restricted to the class of Cobb–Douglas-type functions, there exists an efficient, egalitarian-equivalent, and envy-free allocation if and only if all individuals have the same taste over commodities.

Suggested Citation

  • Susumu Cato, 2020. "Compatibility of egalitarian equivalence and envy-freeness in a continuum-agent economy," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 8(1), pages 97-103, April.
    • Handle: RePEc:spr:etbull:v:8:y:2020:i:1:d:10.1007_s40505-019-00168-2
    DOI: 10.1007/s40505-019-00168-2
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    References listed on IDEAS

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    More about this item

    Keywords

    Egalitarian equivalence; Envy-freeness; Efficiency; Equal-income Walrasian allocation;
    All these keywords.

    JEL classification:

    • D60 - Microeconomics - - Welfare Economics - - - General
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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