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Allocation rules on networks

Author

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  • Ilkilic, Rahmi
  • Kayi, Cagatay

Abstract

When allocating a resource, geographical and infrastructural constraints have to be taken into account. We study the problem of distributing a resource through a network from sources endowed with the resource to citizens with claims. A link between a source and an agent depicts the possibility of a transfer from the source to the agent. Given the supplies at each source, the claims of citizens, and the network, the question is how to allocate the available resources among the citizens. We consider a simple allocation problem that is free of network constraints, where the total amount can be freely distributed. The simple allocation problem is a claims problem where the total amount of claims is greater than what is available. We focus on consistent and resource monotonic rules in claims problems that satisfy equal treatment of equals. We call these rules fairness principles and we extend fairness principles to allocation rules on networks. We require that for each pair of citizens in the network, the extension is robust with respect to the fairness principle. We call this condition pairwise robustness with respect to the fairness principle. We provide an algorithm and show that each fairness principle has a unique extension which is pairwise robust with respect to the fairness principle. We give applications of the algorithm for three fairness principles: egalitarianism, proportionality and equal sacrifice.

Suggested Citation

  • Ilkilic, Rahmi & Kayi, Cagatay, 2012. "Allocation rules on networks," MPRA Paper 37305, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:37305
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    References listed on IDEAS

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    Cited by:

    1. Erik Ansink & Hans-Peter Weikard, 2012. "Sequential sharing rules for river sharing problems," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 38(2), pages 187-210, February.
    2. Erik Ansink & Hans-Peter Weikard, 2015. "Composition properties in the river claims problem," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 44(4), pages 807-831, April.

    More about this item

    Keywords

    Networks; Claims Problems; Egalitarianism; Proportionality; Equal Sacrifice;

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General

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