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Fairness under Uncertainty with Indivisibilities

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  • R?bert F. Veszteg

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Abstract

I analyze an economy with uncertainty in which a set of indivisible objects and a certain amount of money is to be distributed among agents. The set of intertemporally fair social choice functions based on envy-freeness and Pareto efficiency is characterized. I give a necessary and sufficient condition for its non-emptiness and propose a mechanism that implements the set of intertemporally fair allocations in Bayes-Nash equilibrium. Implementation at the ex ante stage is considered, too. I also generalize the existence result obtained with envy-freeness using a broader fairness concept, introducing the aspiration function.

Suggested Citation

  • R?bert F. Veszteg, 2004. "Fairness under Uncertainty with Indivisibilities," UFAE and IAE Working Papers 613.04, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  • Handle: RePEc:aub:autbar:613.04
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    File URL: http://pareto.uab.es/wp/2004/61304.pdf
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    References listed on IDEAS

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    1. Holmstrom, Bengt & Myerson, Roger B, 1983. "Efficient and Durable Decision Rules with Incomplete Information," Econometrica, Econometric Society, vol. 51(6), pages 1799-1819, November.
    2. Thomson, William, 2005. "Divide-and-permute," Games and Economic Behavior, Elsevier, vol. 52(1), pages 186-200, July.
    3. Francis Su, "undated". "Rental Harmony: Sperner's Lemma in Fair Division," Claremont Colleges Working Papers 1999-10, Claremont Colleges.
    4. Jackson, Matthew O, 1991. "Bayesian Implementation," Econometrica, Econometric Society, vol. 59(2), pages 461-477, March.
    5. repec:ebl:ecbull:v:4:y:2002:i:18:p:1-7 is not listed on IDEAS
    6. Corchon, Luis C. & Iturbe-Ormaetxe, Inigo, 2001. "A Proposal to Unify Some Concepts in the Theory of Fairness," Journal of Economic Theory, Elsevier, vol. 101(2), pages 540-571, December.
    7. Alkan, Ahmet & Demange, Gabrielle & Gale, David, 1991. "Fair Allocation of Indivisible Goods and Criteria of Justice," Econometrica, Econometric Society, vol. 59(4), pages 1023-1039, July.
    8. Crawford, V. P. & Heller, W. P., 1979. "Fair division with indivisible commodities," Journal of Economic Theory, Elsevier, vol. 21(1), pages 10-27, August.
    9. Moulin, HervÈ, 1997. "Procedural cum Endstate Justice: An Implementation Viewpoint," Working Papers 97-17, Duke University, Department of Economics.
    10. Thomas R. Palfrey & Sanjay Srivastava, 1987. "On Bayesian Implementable Allocations," Review of Economic Studies, Oxford University Press, vol. 54(2), pages 193-208.
    11. Preston McAfee, R., 1992. "Amicable divorce: Dissolving a partnership with simple mechanisms," Journal of Economic Theory, Elsevier, vol. 56(2), pages 266-293, April.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    aspiration function; envy-free social choice function; fairness; implementation; indivisible goods; uncertainty;

    JEL classification:

    • D39 - Microeconomics - - Distribution - - - Other
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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