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Characterizing Welfare-egalitarian Mechanisms with Solidarity When Valuations are Private Information

Listed author(s):
  • Duygu Yengin

    ()

    (School of Economics, University of Adelaide)

In the problem of assigning indivisible goods and monetary transfers, we characterize welfare-egalitarian mechanisms (that are decision-efficient and incentive compatible) with an axiom of solidarity under preference changes and a fair ranking axiom of order preservation. This result is in line with characterizations of egalitarian rules with solidarity in other economic models. We also show that we can replace order-preservation with egalitarian-equivalence or no-envy (on the subadditive domain) and still characterize the welfare-egalitarian class. We show that, in the model we consider, the welfare-egalitarian mechanisms appear to be the best candidates to satisfy several different fairness and solidarity requirements as well as generating bounded deficits.

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File URL: http://www.economics.adelaide.edu.au/research/papers/doc/wp2011-20.pdf
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Paper provided by University of Adelaide, School of Economics in its series School of Economics Working Papers with number 2011-20.

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Length: 24 pages
Date of creation: Dec 2011
Handle: RePEc:adl:wpaper:2011-20
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Web page: http://www.economics.adelaide.edu.au/

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