Compromising as an equal loss principle

Olivier Cailloux, Beatrice Napolitano () and Remzi Sanver
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Olivier Cailloux: Université Paris-Dauphine, Université PSL, CNRS, LAMSADE
Beatrice Napolitano: Université Paris-Dauphine, Université PSL, CNRS, LAMSADE

Review of Economic Design, 2023, vol. 27, issue 3, No 3, 547-560

Abstract: Abstract A social choice rule aggregates the preferences of a group of individuals over a set of alternatives into a collective choice. The literature admits several social choice rules whose recommendations are supposed to reflect a compromise among individuals. We observe that all these compromise rules can be better described as procedural compromises, i.e., they impose over individuals a willingness to compromise but they do not ensure an outcome where everyone has effectively compromised. We revisit the concept of a compromise in a collective choice environment with at least three individuals having strict preferences over a finite set of alternatives. Referring to a large class of spread measures, we view the concept of compromise from an equal loss perspective, favoring an outcome where every voter concedes as equally as possible. As such, being a compromise may fail Pareto efficiency, which we ensure by asking voters to concede as equally as possible among the Pareto efficient alternatives. We show that Condorcet consistent rules, scoring rules (except antiplurality) and Brams-Kilgour compromises (except fallback bargaining) all fail to ascertain an outcome which is a compromise. A slight restriction on acceptable spread measures suffices to extend the negative result to antiplurality and fallback bargaining. This failure also prevails for social choice problems with two individuals: all well-known two-person social choice rules of the literature, namely, fallback bargaining, Pareto and veto rules, short listing and veto rank, fail to pick ex-post compromises. We conclude that there is a need to propose and study rules that satisfy this equal loss, or outcome oriented, notion of a compromise.

Keywords: Axiomatic analysis; Ex-post compromise; Bargaining; Egalitarianism; Arbitration (search for similar items in EconPapers)
JEL-codes: D71 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s10058-022-00302-w

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