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Decentralized rationing problems

Author

Listed:
  • Josep Maria Izquierdo Aznar

    (Universitat de Barcelona)

  • Pere Timoner Lledó

    (Universitat de Barcelona)

Abstract

Decentralized rationing problems are those in which the resource is not directly assigned to agents, but first allocated to groups of agents and then divided among their members. Within this framework, we define extensions of the constrained equal awards, the constrained equal losses and the proportional rules. We show that the first two rules do not preserve certain essential properties and prove the conditions under which both rules do preserve those properties. We characterize the extension of the proportional rule as the only solution that satisfies individual equal treatment of equals. We prove that the proportional rule is the only solution that assigns the same allocation regardless of whether the resource is distributed directly to agents or in a decentralized manner (with agents grouped). Finally, we analyse a strategic game based on decentralized rationing problems in which agents can move freely across groups to submit their claims.

Suggested Citation

  • Josep Maria Izquierdo Aznar & Pere Timoner Lledó, 2016. "Decentralized rationing problems," UB School of Economics Working Papers 2016/345, University of Barcelona School of Economics.
    • Handle: RePEc:ewp:wpaper:345web
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    References listed on IDEAS

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    Cited by:

    1. Izquierdo, Josep M. & Timoner, Pere, 2019. "Decentralized rationing problems and the proportional rule," Economics Letters, Elsevier, vol. 175(C), pages 88-91.

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    More about this item

    Keywords

    Strategic rationing; decentralized rationing; equal awards rule; equallosses rule; proportional rule; a priori unions.;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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