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Strategy-Proof and Fair Wages

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Abstract

A fair division problem with indivisible objects, e.g. jobs, and one divisible good (money) is considered. The individuals consume one object and money. The class of strategy-proof and fair allocation rules is characterized. The allocation rules in the class are like a Vickrey auction bossy and like the Clark-Groves mechanisms in general not "budget balanced". The efficiency loss due to fairness and strategy-proofness becomes measurable in monetary terms. Two interpretations of the formal model is discussed. First, it is a situation where a given sum of money has to be distributed as wages and fair wages are to be implemented. Second, it is as an auction model where a number of objects are simultaneously traded.

Suggested Citation

  • Svensson, Lars-Gunnar, 2004. "Strategy-Proof and Fair Wages," Working Papers 2004:8, Lund University, Department of Economics.
  • Handle: RePEc:hhs:lunewp:2004_008
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    File URL: http://project.nek.lu.se/publications/workpap/Papers/WP04_8.pdf
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    References listed on IDEAS

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    1. Lars-Gunnar Svensson & Bo Larsson, 2002. "Strategy-proof and nonbossy allocation of indivisible goods and money," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 20(3), pages 483-502.
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    Cited by:

    1. Tommy Andersson & Lars-Gunnar Svensson, 2008. "Weakly fair allocations and strategy-proofness," Review of Economic Design, Springer;Society for Economic Design, vol. 11(4), pages 321-338, February.
    2. Sprumont, Yves, 2013. "Constrained-optimal strategy-proof assignment: Beyond the Groves mechanisms," Journal of Economic Theory, Elsevier, vol. 148(3), pages 1102-1121.
    3. Andersson, Tommy, 2007. "An algorithm for identifying fair and optimal allocations," Economics Letters, Elsevier, vol. 96(3), pages 337-342, September.
    4. Serizawa, Shigehiro & Morimoto, Shuhei, 2015. "Strategy-proofness and efficiency with non-quasi-linear preferences: a characterization of minimum price Walrasian rule," Theoretical Economics, Econometric Society, vol. 10(2), May.
    5. Lars Ehlers & Bettina Klaus, 2007. "Consistent House Allocation," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 30(3), pages 561-574, March.

    More about this item

    Keywords

    ndivisibilities; fairness; strategy-proofness; wages; Vickrey-auction;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • 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
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation

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