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Compensation and sacrifice in the probabilistic rationing of indivisible units

Author

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  • Ricardo Martínez

    (Department of Economics, Universidad de Granada)

  • Juan D. Moreno-Ternero

    (Department of Economics, Universidad Pablo de Olavide)

Abstract

We consider the problem of randomly allocating indivisible units of a resource among agents with conflicting claims on the resource. An axiom reflecting a principle of compensation allows us to characterize the focal probabilistic uniform awards rule. A dual axiom reflecting a principle of sacrifice allows us to characterize the (dual) probabilistic uniform losses rule. The combination of two (other) axioms reflecting both principles (of compensation and sacrifice) allows us to characterize the (compromise) probabilistic concede-and-divide in the two-agent case. There is, however, no consistent extension of this rule to the general case of an arbitrary number of agents.

Suggested Citation

  • Ricardo Martínez & Juan D. Moreno-Ternero, 2022. "Compensation and sacrifice in the probabilistic rationing of indivisible units," Working Papers 22.01, Universidad Pablo de Olavide, Department of Economics.
    • Handle: RePEc:pab:wpaper:22.01
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    References listed on IDEAS

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    More about this item

    Keywords

    game theory; resource allocation; axioms; probabilistic; discrete goods;
    All these keywords.

    JEL classification:

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

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