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On Effcient and Procedurally-Fair Equilibrium Allocations in Sharing Games


  • Naoki Yoshihara


In pruoduction economies with skill differences, this paper discusses resource allocation schemes which are consistent with two notions of procedural fairness: labor sovereignty and equal-division-for-equal-work (EDEW)[Kranich(1994)]. The paper first shows that there always exists an efficient EDEW allocation [Kranich(1994)], which is supported as a Nash equilibrium of a game induced by a sharing mechanism which satisfies the above two principles. Second, since there still remains the implementation problem of efficient EDEW allocations, the paper provides a selection mechanism which itself satisfies labor sovereignty and EDEW, and appropriately selects a sharing mechanism which supports an efficient EDEW allocation under any particular economy. As a result, the paper shows that efficient EDEW allocations can be implemented in Nash equilibria via this selection mechanism.

Suggested Citation

  • Naoki Yoshihara, 2000. "On Effcient and Procedurally-Fair Equilibrium Allocations in Sharing Games," Discussion Paper Series a397, Institute of Economic Research, Hitotsubashi University.
  • Handle: RePEc:hit:hituec:a397

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    References listed on IDEAS

    1. Hervé Moulin, 1990. "Joint Ownership of a Convex Technology: Comparison of Three Solutions," Review of Economic Studies, Oxford University Press, vol. 57(3), pages 439-452.
    2. John E. Roemer, 1986. "Equality of Resources Implies Equality of Welfare," The Quarterly Journal of Economics, Oxford University Press, vol. 101(4), pages 751-784.
    3. Kalai, Ehud & Smorodinsky, Meir, 1975. "Other Solutions to Nash's Bargaining Problem," Econometrica, Econometric Society, vol. 43(3), pages 513-518, May.
    4. Kalai, Ehud, 1977. "Proportional Solutions to Bargaining Situations: Interpersonal Utility Comparisons," Econometrica, Econometric Society, vol. 45(7), pages 1623-1630, October.
    5. Fleurbaey, Marc & Maniquet, Francois, 1996. "Fair allocation with unequal production skills: The No Envy approach to compensation," Mathematical Social Sciences, Elsevier, vol. 32(1), pages 71-93, August.
    6. Thomson, William, 1980. "Two characterizations of the Raiffa solution," Economics Letters, Elsevier, vol. 6(3), pages 225-231.
    7. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
    8. John P. Conley & Simon Wilkie & Richard P. McLean, 1996. "Reference functions and possibility theorems for cardinal social choice problems," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 14(1), pages 65-78.
    9. Chen, Mark A. & Maskin, Eric S., 1999. "Bargaining, Production, and Monotonicity in Economic Environments," Journal of Economic Theory, Elsevier, vol. 89(1), pages 140-147, November.
    10. Simon Wilkie & Dimitrios Diamantaras, 1996. "On the set of Pareto efficient allocations in economies with public goods (*)," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 7(2), pages 371-379.
    11. Roemer, John E., 1988. "Axiomatic bargaining theory on economic environments," Journal of Economic Theory, Elsevier, vol. 45(1), pages 1-31, June.
    12. Howe, Roger, 1987. "Sections and extensions of concave functions," Journal of Mathematical Economics, Elsevier, vol. 16(1), pages 53-64, February.
    13. Gines, M. & Marhuenda, F., 2000. "Welfarism in Economic Domains," Journal of Economic Theory, Elsevier, vol. 93(2), pages 191-204, August.
    14. Moulin, Herve & Roemer, John, 1989. "Public Ownership of the External World and Private Ownership of Self," Journal of Political Economy, University of Chicago Press, vol. 97(2), pages 347-367, April.
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    Cited by:

    1. Reiko Gotoh & Kotaro Suzumura & Naoki Yoshihara, 2005. "Extended social ordering functions for rationalizing fair allocation rules as game forms in the sense of Rawls and Sen," International Journal of Economic Theory, The International Society for Economic Theory, vol. 1(1), pages 21-41.

    More about this item

    JEL classification:

    • 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
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being


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