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The Principle of Strong Kiminishing Transfer

Author

Listed:
  • Chateauneuf, A.
  • Gajdos, T.
  • Wilthien, P.-H.

Abstract

In a seminal paper, Kolm [14] introduces the principle diminishing transfer. This principle requires that a transfert from an individual with income x to one with income x - D(D > 0) has a greater impact on social welfare the lower x is. On the other hand Mehran [15] and Kakwani [11] introduced another principle, namely the principle of dual diminishing transfer, which states that a transfer from an individual with rank i to one with rank (i - p) has a greater impact the lower i is. We give here necessary and sufficient conditions for a decision maker who behaves in accordance with dual Yaari's model to respect the principle of dual diminishing transfer. Unfortunately, it appears that if a decision maker who behaves in accordance with the RDEU model respects the principle of diminishing transfer, then he behaves in accordance with the EU model.

Suggested Citation

  • Chateauneuf, A. & Gajdos, T. & Wilthien, P.-H., 1999. "The Principle of Strong Kiminishing Transfer," Papiers d'Economie Mathématique et Applications 1999-96, Université Panthéon-Sorbonne (Paris 1).
    • Handle: RePEc:fth:pariem:1999-96
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    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • 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
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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