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Fairness, Justified Envy and Non-Discrimination with Consumption Externalities

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We study fairness in finite exchange economies with consumption externalities using the framework of A-economies, in which each agent is associated with a reference group and may propose consumption plans for the agents belonging to that group. We introduce notions of coalitional fairness and justified envy adapted to this reference-group structure and relate them to A-equilibrium and the fuzzy A-core. Under the conditions ensuring fuzzy A-core equivalence, equilibrium, core, coalitional fairness and the justified A-envy-free core characterize the same allocations. We also introduce a notion of type appropriate to A-economies and show that, with Aubin coalitions, imposing a solidarity based non-discrimination requirement does not further restrict the fuzzy A-core. The analysis highlights how the reference structure governs both decentralized opportunities and the relevant comparisons underlying fairness.

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  • Maria Gabriella Graziano, 2026. "Fairness, Justified Envy and Non-Discrimination with Consumption Externalities," CSEF Working Papers 801, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    • Handle: RePEc:sef:csefwp:801
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    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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