Reallocation of an infinitely divisible good

Bettina Klaus (), Hans Peters and Ton Storcken
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Ton Storcken: Department of Quantitative Economics, Maastricht University, P.O. Box 616, 6200 MD Maastricht, THE NETHERLANDS

Economic Theory, 1997, vol. 10, issue 2, 305-333

Abstract: We consider the problem of reallocating the total initial endowments of an infinitely divisible commodity among agents with single-peaked preferences. With the uniform reallocation rule we propose a solution which satisfies many appealing properties, describing the effect of population and endowment variations on the outcome. The central properties which are studied in this context are population monotonicity, bilateral consistency, (endowment) monotonicity and (endowment) strategy-proofness. Furthermore, the uniform reallocation rule is Pareto optimal and satisfies several equity conditions, e.g., equal-treatment and envy-freeness. We study the trade-off between properties concerning variation and properties concerning equity. Furthermore, we provide several characterizations of the uniform reallocation rule based on these properties.

JEL-codes: D71 (search for similar items in EconPapers)
Date: 1997
Note: Received: August 29, 1995; revised version June 26, 1996
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Citations: View citations in EconPapers (25)

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Working Paper: Reallocation of an infinitely divisible good (1995)
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