Efficiency in the cake-eating problem with quasi-geometric discounting

Juan Chavez-Martin del Campo ()

Economics Bulletin, 2007, vol. 4, issue 43, 1-8

Abstract: This paper shows that any equilibrium allocation in the cake-eating problem with quasi-geometric discounting is not Pareto efficient. However, efficiency can be established by introducing a planner who controls the initial endowment and makes transfers over time. It is shown than any Pareto efficient allocation can be supported by a perfect equilibrium with transfers.

Keywords: Pareto; efficiency (search for similar items in EconPapers)
JEL-codes: D6 D9 (search for similar items in EconPapers)
Date: 2007-11-14
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