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No profitable decompositions in quasi-linear allocation problems

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  • de Clippel, Geoffroy
  • Bejan, Camelia

Abstract

We study the problem of allocating a bundle of perfectly divisible private goods from an axiomatic point of view, in situations where compensations can be made through monetary transfers. The key property we impose on the allocation rule requires that no agent should be able to gain by decomposing the problem into sequences of subproblems. Combined with additional standard properties, it leads to a characterization of the rule that shares the total surplus equally. Hence a traditional welfarist rule emerges as the unique consequence of our axioms phrased in a natural economic environment.

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  • de Clippel, Geoffroy & Bejan, Camelia, 2011. "No profitable decompositions in quasi-linear allocation problems," Journal of Economic Theory, Elsevier, vol. 146(5), pages 1995-2012, September.
    • Handle: RePEc:eee:jetheo:v:146:y:2011:i:5:p:1995-2012
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    Cited by:

    1. Geoffroy de Clippel, 2010. "Copmment on Egalitarianism under Incomplete Information," Working Papers 2010-4, Brown University, Department of Economics.
    2. Geoffroy de Clippel, 2009. "Axiomatic Bargaining on Economic Enviornments with Lott," Working Papers 2009-5, Brown University, Department of Economics.

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