On recursive solutions to simple allocation problems

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Theory and Decision, 2013, vol. 75, issue 3, 449-463

Abstract: We propose and axiomatically analyze a class of rational solutions to simple allocation problems where a policy-maker allocates an endowment $$E$$ among $$n$$ agents described by a characteristic vector c. We propose a class of recursive rules which mimic a decision process where the policy-maker initially starts with a reference allocation of $$E$$ in mind and then uses the data of the problem to recursively adjust his previous allocation decisions. We show that recursive rules uniquely satisfy rationality, c-continuity, and other-c monotonicity. We also show that a well-known member of this class, the Equal Gains rule, uniquely satisfies rationality, c-continuity, and equal treatment of equals. Copyright Springer Science+Business Media New York 2013

Keywords: Simple allocation problem; Rational; Recursive; Algorithm; Equal Gains; Continuity; Monotonicity; Equal treatment of equals (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:kap:theord:v:75:y:2013:i:3:p:449-463

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DOI: 10.1007/s11238-013-9359-2

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