Uniform Reductions are not that Bad

Urs Steiner Brandt ()

No 20/01, Working Papers from University of Southern Denmark, Department of Environmental and Business Economics

Abstract: Both Barrett (1991) and Hoel (1991) show that uniform solutions cannot guarantee that the IR constraint is satisfied. This drawback of uniform solutions dramatically reduces feasibility of uniform solutions. However, when uniform reductions are property specified, this conclusion is no longer valid. Compared to Barrett (1991), which proposes a uniform absolute reduction, this paper proposes uniform solutions that are defined as equal percentage reduction compared to some pre-agreement reduction level, in accordance with real world specification. For such a specification, uniform solutions that satisfy IR will always exist, establishing a new, and more positive, view upon uniform solutions.

Keywords: Uniform reduction obligations; individual rationality. (search for similar items in EconPapers)
JEL-codes: Q28 H4 H77 (search for similar items in EconPapers)
Date: 2001-05
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