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Compensation and sacrifice in the probabilistic rationing of indivisible units

Author

Listed:
  • Ricardo Martínez

    (Department of Economic Theory and Economic History, University of Granada.)

  • Juan D Moreno Ternero

    (Department of Economics, Universidad Pablo de Olavide.)

Abstract

We consider the problem of randomly allocating indivisible units of a resource among agents with conflicting claims on the available amount. In the two-agent case, we characterize three focal rules combining axioms reflecting principles of compensation and sacrifice: probabilistic uniform awards, probabilistic uniform losses and probabilistic concede-and-divide. In the general case of n agents, the two uniform rules are characterized adding the axiom of consistency. There is, however, no consistent extension of probabilistic concede-and-divide.

Suggested Citation

  • Ricardo Martínez & Juan D Moreno Ternero, 2020. "Compensation and sacrifice in the probabilistic rationing of indivisible units," ThE Papers 20/03, Department of Economic Theory and Economic History of the University of Granada..
  • Handle: RePEc:gra:wpaper:20/03
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    File URL: http://www.ugr.es/~teoriahe/RePEc/gra/wpaper/thepapers20_03.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    rationing; resource allocation; axioms; probabilistic; discrete goods.;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games

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