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Strictly fair allocations in large exchange economies

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  • Zhou, Lin

Abstract

In this paper we introduce the concept of a strictly fair allociation and investigate the set of strictly fair allocations in large exchange economies. We prove that when agents' utility functions are differentiable, the set of strictly fair allocations coincides with the set of equal-income Walrasian equilibria. This is shown using both the “limit theorem” approach and the “limit economy” approach. We also extend the analysis to economies that have both atoms and an atomless sector. These results substantially improve upon the existing characterizations of equal-income Walrasian equilibria in terms of economic efficiency and economic equity.

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  • Zhou, Lin, 1992. "Strictly fair allocations in large exchange economies," Journal of Economic Theory, Elsevier, vol. 57(1), pages 158-175.
    • Handle: RePEc:eee:jetheo:v:57:y:1992:i:1:p:158-175
    DOI: 10.1016/S0022-0531(05)80046-8
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    References listed on IDEAS

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    1. Thompson, W. & Zhou, L., 1991. "Consistent Allocation Rules in Atomless Economies," RCER Working Papers 294, University of Rochester - Center for Economic Research (RCER).
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    Cited by:

    1. Chiara Donnini & Marialaura Pesce, 2023. "Fairness and formation rules of coalitions," International Journal of Economic Theory, The International Society for Economic Theory, vol. 19(4), pages 933-960, December.
    2. Antonio Miralles & Marek Pycia, 2017. "Large vs. Continuum Assignment Economies: Efficiency and Envy-Freeness," Working Papers 950, Barcelona School of Economics.
    3. Achille Basile & Maria Gabriella Graziano & Ciro Tarantino, 2018. "Coalitional fairness with participation rates," Journal of Economics, Springer, vol. 123(2), pages 97-139, March.
    4. Thomson, William, 2011. "Chapter Twenty-One - Fair Allocation Rules," Handbook of Social Choice and Welfare, in: K. J. Arrow & A. K. Sen & K. Suzumura (ed.), Handbook of Social Choice and Welfare, edition 1, volume 2, chapter 21, pages 393-506, Elsevier.
    5. Chiara Donnini & Marialaura Pesce, 2020. "Strict fairness of equilibria in asymmetric information economies and mixed markets," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 69(1), pages 107-124, February.
    6. Chiara Donnini & Maria Graziano & Marialaura Pesce, 2014. "Coalitional fairness in interim differential information economies," Journal of Economics, Springer, vol. 111(1), pages 55-68, February.
    7. Chiara Donnini & Marialaura Pesce, 2021. "Fairness and fuzzy coalitions," International Journal of Game Theory, Springer;Game Theory Society, vol. 50(4), pages 1033-1052, December.
    8. Chiara Donnini & Maria Laura Pesce, 2018. "Strict Fairness of Equilibria in Mixed and Asymmetric Information Economies," CSEF Working Papers 498, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    9. Thomson, William, 2005. "Divide-and-permute," Games and Economic Behavior, Elsevier, vol. 52(1), pages 186-200, July.
    10. Achille Basile & Maria Graziano & Marialaura Pesce, 2014. "On fairness of equilibria in economies with differential information," Theory and Decision, Springer, vol. 76(4), pages 573-599, April.
    11. Sprumont, Yves & Zhou, Lin, 1999. "Pazner-Schmeidler rules in large societies," Journal of Mathematical Economics, Elsevier, vol. 31(3), pages 321-339, April.
    12. Antonio Miralles, "undated". "Pseudomarkets with Priorities in Large Random Assignment Economies," Working Papers 537, Barcelona School of Economics.
    13. Itai Ashlagi & Peng Shi, 2016. "Optimal Allocation Without Money: An Engineering Approach," Management Science, INFORMS, vol. 62(4), pages 1078-1097, April.
    14. Cato, Susumu, 2010. "Local strict envy-freeness in large economies," Mathematical Social Sciences, Elsevier, vol. 59(3), pages 319-322, May.

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