IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2107.12870.html
   My bibliography  Save this paper

A Free and Fair Economy: A Game of Justice and Inclusion

Author

Listed:
  • Ghislain H. Demeze-Jouatsa
  • Roland Pongou
  • Jean-Baptiste Tondji

Abstract

Frequent violations of fair principles in real-life settings raise the fundamental question of whether such principles can guarantee the existence of a self-enforcing equilibrium in a free economy. We show that elementary principles of distributive justice guarantee that a pure-strategy Nash equilibrium exists in a finite economy where agents freely (and non-cooperatively) choose their inputs and derive utility from their pay. Chief among these principles is that: 1) your pay should not depend on your name, and 2) a more productive agent should not earn less. When these principles are violated, an equilibrium may not exist. Moreover, we uncover an intuitive condition -- technological monotonicity -- that guarantees equilibrium uniqueness and efficiency. We generalize our findings to economies with social justice and inclusion, implemented in the form of progressive taxation and redistribution, and guaranteeing a basic income to unproductive agents. Our analysis uncovers a new class of strategic form games by incorporating normative principles into non-cooperative game theory. Our results rely on no particular assumptions, and our setup is entirely non-parametric. Illustrations of the theory include applications to exchange economies, surplus distribution in a firm, contagion and self-enforcing lockdown in a networked economy, and bias in the academic peer-review system. Keywords: Market justice; Social justice; Inclusion; Ethics; Discrimination; Self-enforcing contracts; Fairness in non-cooperative games; Pure strategy Nash equilibrium; Efficiency. JEL Codes: C72, D30, D63, J71, J38

Suggested Citation

  • Ghislain H. Demeze-Jouatsa & Roland Pongou & Jean-Baptiste Tondji, 2021. "A Free and Fair Economy: A Game of Justice and Inclusion," Papers 2107.12870, arXiv.org.
  • Handle: RePEc:arx:papers:2107.12870
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2107.12870
    File Function: Latest version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Geoffroy de Clippel & Kareen Rozen, 2022. "Fairness through the Lens of Cooperative Game Theory: An Experimental Approach," American Economic Journal: Microeconomics, American Economic Association, vol. 14(3), pages 810-836, August.
    2. David Card & Stefano DellaVigna & Patricia Funk & Nagore Iriberri, 2020. "Are Referees and Editors in Economics Gender Neutral?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 135(1), pages 269-327.
    3. Nash, John, 1953. "Two-Person Cooperative Games," Econometrica, Econometric Society, vol. 21(1), pages 128-140, April.
    4. Rema Hanna & Benjamin A. Olken, 2018. "Universal Basic Incomes versus Targeted Transfers: Anti-Poverty Programs in Developing Countries," Journal of Economic Perspectives, American Economic Association, vol. 32(4), pages 201-226, Fall.
    5. James J. Heckman & Sidharth Moktan, 2020. "Publishing and promotion in economics - The tyranny of the Top Five," Vox eBook Chapters, in: Sebastian Galliani & Ugo Panizza (ed.), Publishing and Measuring Success in Economics, edition 1, volume 1, chapter 1, pages 23-32, Centre for Economic Policy Research.
    6. Roland Pongou & Roberto Serrano, 2013. "Fidelity Networks and Long-Run Trends in HIV/AIDS Gender Gaps," American Economic Review, American Economic Association, vol. 103(3), pages 298-302, May.
    7. Oriol Carbonell-Nicolau, 2011. "The Existence of Perfect Equilibrium in Discontinuous Games," Games, MDPI, vol. 2(3), pages 1-22, July.
    8. David H. Autor & Mark G. Duggan, 2006. "The Growth in the Social Security Disability Rolls: A Fiscal Crisis Unfolding," Journal of Economic Perspectives, American Economic Association, vol. 20(3), pages 71-96, Summer.
    9. Victor H. Aguiar & Roland Pongou & Roberto Serrano & Jean-Baptiste Tondji, 2018. "An Index of Unfairness," Working Papers 2018-9, Brown University, Department of Economics.
    10. Mario L. Small & Devah Pager, 2020. "Sociological Perspectives on Racial Discrimination," Journal of Economic Perspectives, American Economic Association, vol. 34(2), pages 49-67, Spring.
    11. Bengt Holmstrom, 1982. "Moral Hazard in Teams," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 324-340, Autumn.
    12. Francis, Andrew M. & Tannuri-Pianto, Maria, 2012. "The redistributive equity of affirmative action: Exploring the role of race, socioeconomic status, and gender in college admissions," Economics of Education Review, Elsevier, vol. 31(1), pages 45-55.
    13. Roberto Serrano, 2021. "Sixty-seven years of the Nash program: time for retirement?," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 12(1), pages 35-48, March.
    14. Rabia Nessah & Guoqiang Tian, 2016. "On the existence of Nash equilibrium in discontinuous games," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 61(3), pages 515-540, March.
    15. George A. Akerlof, 2020. "Sins of Omission and the Practice of Economics," Journal of Economic Literature, American Economic Association, vol. 58(2), pages 405-418, June.
    16. Mallick, Indrajit, 2011. "On the existence of pure strategy Nash equilibria in two person discrete games," Economics Letters, Elsevier, vol. 111(2), pages 144-146, May.
    17. Aguiar, Victor H. & Pongou, Roland & Tondji, Jean-Baptiste, 2018. "A non-parametric approach to testing the axioms of the Shapley value with limited data," Games and Economic Behavior, Elsevier, vol. 111(C), pages 41-63.
    18. Shapley, Lloyd S & Shubik, Martin, 1977. "An Example of a Trading Economy with Three Competitive Equilibria," Journal of Political Economy, University of Chicago Press, vol. 85(4), pages 873-875, August.
    19. Pongou, Roland & Tondji, Jean-Baptiste, 2018. "Valuing inputs under supply uncertainty: The Bayesian Shapley value," Games and Economic Behavior, Elsevier, vol. 108(C), pages 206-224.
    20. David Card & Stefano DellaVigna, 2013. "Nine Facts about Top Journals in Economics," Journal of Economic Literature, American Economic Association, vol. 51(1), pages 144-161, March.
    21. Marie Hyland & Simeon Djankov & Pinelopi Koujianou Goldberg, 2020. "Gendered Laws and Women in the Workforce," American Economic Review: Insights, American Economic Association, vol. 2(4), pages 475-490, December.
    22. Khan, M. Ali & Yeneng, Sun, 1995. "Pure strategies in games with private information," Journal of Mathematical Economics, Elsevier, vol. 24(7), pages 633-653.
    23. Wright, Robert E & Ermisch, John F, 1991. "Gender Discrimination in the British Labour Market: A Reassessment," Economic Journal, Royal Economic Society, vol. 101(406), pages 508-522, May.
    24. Philip J. Reny, 2020. "Nash Equilibrium in Discontinuous Games," Annual Review of Economics, Annual Reviews, vol. 12(1), pages 439-470, August.
    25. Heather Sarsons, 2017. "Recognition for Group Work: Gender Differences in Academia," American Economic Review, American Economic Association, vol. 107(5), pages 141-145, May.
    26. Reimers, Cordelia W, 1983. "Labor Market Discrimination against Hispanic and Black Men," The Review of Economics and Statistics, MIT Press, vol. 65(4), pages 570-579, November.
    27. Kerwin Kofi Charles & Jonathan Guryan, 2008. "Prejudice and Wages: An Empirical Assessment of Becker's The Economics of Discrimination," Journal of Political Economy, University of Chicago Press, vol. 116(5), pages 773-809, October.
    28. Pongou, Roland & Serrano, Roberto, 2016. "Volume of trade and dynamic network formation in two-sided economies," Journal of Mathematical Economics, Elsevier, vol. 63(C), pages 147-163.
    29. Glenn Ellison, 2002. "Evolving Standards for Academic Publishing: A q-r Theory," Journal of Political Economy, University of Chicago Press, vol. 110(5), pages 994-1034, October.
    30. Martin J. Osborne & Ariel Rubinstein, 1994. "A Course in Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262650401, April.
    31. Ziad, Abderrahmane, 1999. "Pure strategy Nash equilibria of non-zero-sum two-person games: non-convex case," Economics Letters, Elsevier, vol. 62(3), pages 307-310, March.
    32. Kevin Lang & Michael Manove, 2011. "Education and Labor Market Discrimination," American Economic Review, American Economic Association, vol. 101(4), pages 1467-1496, June.
    33. Marianne Bertrand & Sendhil Mullainathan, 2004. "Are Emily and Greg More Employable Than Lakisha and Jamal? A Field Experiment on Labor Market Discrimination," American Economic Review, American Economic Association, vol. 94(4), pages 991-1013, September.
    34. Philip J. Reny, 1999. "On the Existence of Pure and Mixed Strategy Nash Equilibria in Discontinuous Games," Econometrica, Econometric Society, vol. 67(5), pages 1029-1056, September.
    35. Tommaso Colussi, 2018. "Social Ties in Academia: A Friend Is a Treasure," The Review of Economics and Statistics, MIT Press, vol. 100(1), pages 45-50, March.
    36. Balsa, Ana I. & McGuire, Thomas G., 2001. "Statistical discrimination in health care," Journal of Health Economics, Elsevier, vol. 20(6), pages 881-907, November.
    37. Laband, David N & Piette, Michael J, 1994. "Favoritism versus Search for Good Papers: Empirical Evidence Regarding the Behavior of Journal Editors," Journal of Political Economy, University of Chicago Press, vol. 102(1), pages 194-203, February.
    38. Marlène Koffi, 2021. "Gendered Citations at Top Economic Journals," AEA Papers and Proceedings, American Economic Association, vol. 111, pages 60-64, May.
    39. Athey, Susan, 2001. "Single Crossing Properties and the Existence of Pure Strategy Equilibria in Games of Incomplete Information," Econometrica, Econometric Society, vol. 69(4), pages 861-889, July.
    40. Carbonell-Nicolau, Oriol, 2011. "On the existence of pure-strategy perfect equilibrium in discontinuous games," Games and Economic Behavior, Elsevier, vol. 71(1), pages 23-48, January.
    41. Carmona, Guilherme & Podczeck, Konrad, 2020. "Pure strategy Nash equilibria of large finite-player games and their relationship to non-atomic games," Journal of Economic Theory, Elsevier, vol. 187(C).
    42. Claudia Goldin & Sari Pekkala Kerr & Claudia Olivetti & Erling Barth, 2017. "The Expanding Gender Earnings Gap: Evidence from the LEHD-2000 Census," American Economic Review, American Economic Association, vol. 107(5), pages 110-114, May.
    43. SCHMEIDLER, David, 1973. "Equilibrium points of nonatomic games," LIDAM Reprints CORE 146, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    44. Colussi, Tommaso, 2015. "Social Ties in Academia: A Friend is a Treasure," IZA Discussion Papers 9414, Institute of Labor Economics (IZA).
    45. Siwan Anderson & Debraj Ray, 2010. "Missing Women: Age and Disease," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 77(4), pages 1262-1300.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Demeze-Jouatsa, Ghislain-Herman & Pongou, Roland & Tondji, Jean-Baptiste, 2021. "A Free and Fair Economy: A Game of Justice and Inclusion," Center for Mathematical Economics Working Papers 653, Center for Mathematical Economics, Bielefeld University.
    2. Ghislain Herman Demeze-Jouatsa & Roland Pongou & Jean-Baptiste Tondji, 2024. "Justice, inclusion, and incentives," Journal of Theoretical Politics, , vol. 36(2), pages 101-131, April.
    3. Rabia Nessah, 2022. "Weakly continuous security and nash equilibrium," Theory and Decision, Springer, vol. 93(4), pages 725-745, November.
    4. Cloos, Janis & Greiff, Matthias & Rusch, Hannes, 2020. "Geographical Concentration and Editorial Favoritism within the Field of Laboratory Experimental Economics (RM/19/029-revised-)," Research Memorandum 014, Maastricht University, Graduate School of Business and Economics (GSBE).
    5. Ann Mari May & Mary G. McGarvey & Yana Rodgers & Mark Killingsworth, 2021. "Critiques, Ethics, Prestige and Status: A Survey of Editors in Economics," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 47(2), pages 295-318, April.
    6. Rabia Nessah, 2013. "Weakly Continuous Security in Discontinuous and Nonquasiconcave Games: Existence and Characterization," Working Papers 2013-ECO-20, IESEG School of Management.
    7. Bransch, Felix & Kvasnicka, Michael, 2022. "Male Gatekeepers: Gender Bias in the Publishing Process?," Journal of Economic Behavior & Organization, Elsevier, vol. 202(C), pages 714-732.
    8. Svenja Flechtner, 2021. "Dimensions of Poverty. Measurement, Epistemic Injustices and Social Activism," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 67(2), pages 530-544, June.
    9. Oriol Carbonell-Nicolau & Richard McLean, 2013. "Approximation results for discontinuous games with an application to equilibrium refinement," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 54(1), pages 1-26, September.
    10. Lawson, Nicholas, 2023. "What citation tests really tell us about bias in academic publishing," European Economic Review, Elsevier, vol. 158(C).
    11. Lorenzo Ductor & Bauke Visser, 2023. "Concentration of power at the editorial boards of economics journals," Journal of Economic Surveys, Wiley Blackwell, vol. 37(2), pages 189-238, April.
    12. Pongou, Roland & Tondji, Jean-Baptiste, 2024. "The reciprocity set," Journal of Mathematical Economics, Elsevier, vol. 112(C).
    13. Peter Andre & Armin Falk, 2021. "What’s Worth Knowing? Economists’ Opinions about Economics," ECONtribute Discussion Papers Series 102, University of Bonn and University of Cologne, Germany.
    14. Philip J. Reny, 2020. "Nash Equilibrium in Discontinuous Games," Annual Review of Economics, Annual Reviews, vol. 12(1), pages 439-470, August.
    15. Payson Steven, 2019. "Cite This Economics Paper! It Is Time for the House of Cards to Fall Down," Open Economics, De Gruyter, vol. 2(1), pages 1-18, January.
    16. Bethmann, Dirk & Bransch, Felix & Kvasnicka, Michael & Sadrieh, Abdolkarim, 2023. "Home Bias in Top Economics Journals," IZA Discussion Papers 15965, Institute of Labor Economics (IZA).
    17. Cloos, Janis & Greiff, Matthias & Rusch, Hannes, 2021. "Editorial favoritism in the field of laboratory experimental economics (RM/20/014-revised-)," Research Memorandum 005, Maastricht University, Graduate School of Business and Economics (GSBE).
    18. Ductor, Lorenzo & Visser, Bauke, 2022. "When a coauthor joins an editorial board," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 576-595.
    19. Rubin, Amir & Rubin, Eran & Segal, Dan, 2023. "Editor home bias?," Research Policy, Elsevier, vol. 52(6).
    20. Oriol Carbonell-Nicolau, 2021. "Perfect equilibria in games of incomplete information," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 71(4), pages 1591-1648, June.

    More about this item

    Keywords

    market justice; social justice; inclusion; ethics; discrimination; self-enforcing contracts; fairness in non-cooperative games; pure strategy nash equilibrium; efficiency. jel codes: c72; d30; d63; j71; j38;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D30 - Microeconomics - - Distribution - - - General
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:2107.12870. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.