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Egalitarian Equivalence under Asymmetric Information

Author

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  • Geoffroy De Clippel
  • David Pérez-Castrillo
  • David Wettstein

Abstract

We propose a definition of egalitarian equivalence that extends Pazner and Schmeidler's (1978) concept to environments with incomplete information. If every feasible allocation rule can be implemented by an incentive compatible mechanism (as, for instance, in the case of non-exclusive information), then interim egalitarian equivalence and interim incentive efficiency remain compatible, as they were under complete information. When incentive constraints are more restrictive, on the other hand, the two criteria may become incompatible.

Suggested Citation

  • Geoffroy De Clippel & David Pérez-Castrillo & David Wettstein, 2010. "Egalitarian Equivalence under Asymmetric Information," Working Papers 431, Barcelona School of Economics.
    • Handle: RePEc:bge:wpaper:431
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    References listed on IDEAS

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    Cited by:

    1. Eric van Damme & Xu Lang, 2022. "Two-Person Bargaining when the Disagreement Point is Private Information," Papers 2211.06830, arXiv.org, revised Jan 2024.
    2. Geoffroy de Clippel, 2010. "Copmment on Egalitarianism under Incomplete Information," Working Papers 2010-4, Brown University, Department of Economics.
    3. Yuan Ju, 2013. "Efficiency and compromise: a bid-offer–counteroffer mechanism with two players," International Journal of Game Theory, Springer;Game Theory Society, vol. 42(2), pages 501-520, May.

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    More about this item

    Keywords

    Pareto Efficiency; Egalitarian Equivalence; asymmetric Information;
    All these keywords.

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games

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