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Egalitarian Equivalence under Asymmetric Information

Author

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  • Geoffroy de Clippel

    ()

  • David Pérez-Castrillo

    ()

  • David Wettstein

    ()

Abstract

We propose a definition of egalitarian equivalence that extends Pazner and Schmeidler's (1978) concept to environments with incomplete information. If every feasible allocation rule can be implemented by an incentive compatible mechanism (as, for instance, in the case of non-exclusive information), then interim egalitarian equivalence and interim incentive efficiency remain compatible, as they were under complete information. When incentive constraints are more restrictive, on the other hand, the two criteria may become incompatible.

Suggested Citation

  • Geoffroy de Clippel & David Pérez-Castrillo & David Wettstein, 2010. "Egalitarian Equivalence under Asymmetric Information," UFAE and IAE Working Papers 813.10, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  • Handle: RePEc:aub:autbar:813.10
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    References listed on IDEAS

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    Cited by:

    1. Geoffroy de Clippel, 2010. "Copmment on Egalitarianism under Incomplete Information," Working Papers 2010-4, Brown University, Department of Economics.
    2. Yuan Ju, 2013. "Efficiency and compromise: a bid-offer–counteroffer mechanism with two players," International Journal of Game Theory, Springer;Game Theory Society, vol. 42(2), pages 501-520, May.

    More about this item

    Keywords

    Pareto Efficiency; Egalitarian Equivalence; Asymmetric Information;

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games

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