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Guaranteed shares of benefits and costs

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  • Anna Bogomolnaia
  • Herv'e Moulin

Abstract

We revisit the self-ownership viewpoint to regulate the utilisation of common property resources. Allocating to each agent "the fruit of their own labor" is typically ill-depned, so we look for tight approximations of this decentralised ideal. For each agent i two guarantees limit, from above and below, the impact of other agents on i's allocation. They limit the range of unscripted negotiations, or the choice of a full sharing rule. Our context-free model of the commons is a mapping W from profiles of "types" to a freely transferable amount of benefit or cost. If W is super (resp. sub) modular there is a single tight upper (resp. lower) guarantee, and an infinite menu of tight lower (resp. upper) guarantees, each one conveying a precise normative viewpoint. We describe the menu for essentially all modular two person problems, and familiar examples like the allocation of an indivisible item, cooperative production, and facility location.

Suggested Citation

  • Anna Bogomolnaia & Herv'e Moulin, 2024. "Guaranteed shares of benefits and costs," Papers 2406.14198, arXiv.org, revised Nov 2024.
  • Handle: RePEc:arx:papers:2406.14198
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    References listed on IDEAS

    as
    1. Hervé Moulin & Yves Sprumont, 2007. "Fair allocation of production externalities : recent results," Revue d'économie politique, Dalloz, vol. 117(1), pages 7-36.
    2. Anna Bogomolnaia & Hervé Moulin & Fedor Sandomirskiy & Elena Yanovskaya, 2017. "Competitive Division of a Mixed Manna," Econometrica, Econometric Society, vol. 85(6), pages 1847-1871, November.
    3. Bogomolnaia, Anna & Holzman, Ron & Moulin, Hervé, 2023. "On guarantees, vetoes and random dictators," Theoretical Economics, Econometric Society, vol. 18(1), January.
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    7. Fleurbaey, Marc & Maniquet, Francois, 1996. "Cooperative Production: A Comparison of Welfare Bounds," Games and Economic Behavior, Elsevier, vol. 17(2), pages 200-208, December.
    8. Hervé Moulin, 2019. "Fair Division in the Internet Age," Annual Review of Economics, Annual Reviews, vol. 11(1), pages 407-441, August.
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