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Strictly Fair Allocations in Large Exchange Economies

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Abstract

In this paper we introduce the concept of a strictly fair allocation 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 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 both economic efficiency and economic equity.

Suggested Citation

  • Lin Zhou, 1991. "Strictly Fair Allocations in Large Exchange Economies," Cowles Foundation Discussion Papers 972, Cowles Foundation for Research in Economics, Yale University.
    • Handle: RePEc:cwl:cwldpp:972
    Note: CFP 813.
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    References listed on IDEAS

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    Cited by:

    1. 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.
    2. Antonio Miralles, "undated". "Pseudomarkets with Priorities in Large Random Assignment Economies," Working Papers 537, Barcelona School of Economics.
    3. Lin Zhou, 1991. "An 'Average' Lyapunov Convexity Theorem and Some Core Equivalence Results," Cowles Foundation Discussion Papers 976, Cowles Foundation for Research in Economics, Yale University.

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    More about this item

    Keywords

    Exchange economy; Walrasian equilibrium; resource allocation;
    All these keywords.

    JEL classification:

    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • D60 - Microeconomics - - Welfare Economics - - - General
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models

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