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Efficiency in the cake-eating problem with quasi-geometric discounting

Author

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  • Juan Carlos Chavez-Martin del Campo

    (Guanajuato School of Economics, Universidad de Guanajuato)

Abstract

This paper shows that any equilibrium allocation in the cake-eating problem with quasi-geometric discounting is not Pareto efficient. However, efficiency can be established by introducing a planner who controls the initial endowment and makes transfers over time. It is shown than any Pareto efficient allocation can be supported by a perfect equilibrium with transfers.

Suggested Citation

  • Juan Carlos Chavez-Martin del Campo, 2007. "Efficiency in the cake-eating problem with quasi-geometric discounting," Economics Bulletin, AccessEcon, vol. 4(43), pages 1-8.
    • Handle: RePEc:ebl:ecbull:eb-07d90006
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Pareto efficiency;

    JEL classification:

    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • D6 - Microeconomics - - Welfare Economics

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