Equity and efficiency in an overlapping generation model
Tanguy Isaac () and
Paolo Giovanni Piacquadio
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Tanguy Isaac: Université catholique de Louvain, CORE, Belgium
No 2012059, CORE Discussion Papers from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)
The paper addresses intergenerational and intragenerational equity in an overlapping generation economy. We aim at defining an egalitarian distribution of a constant stream of resources, when preferences are ordinal and non-comparable. We establish the impossibility of efficiently distributing resources while treating equally agents with same preferences that belong to possibly different generations. We thus propose an egalitarian criterion based on the equal-split guarantee: this requires all agents to find their assigned consumption bundle at least as desirable as the equal division of resources. Finally, we show how to construct a cardinalization of the preferences that enables well-being comparisons: this allows defining the family of critical-level utilitarian orderings that top-rank the egalitarian solution.
Keywords: intergenerational equity; intragenerational equity; overlapping generation model; no-envy; equal-split guarantee; allocation rules; utilitarian welfare function (search for similar items in EconPapers)
JEL-codes: D61 D63 D91 (search for similar items in EconPapers)
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Journal Article: Equity and efficiency in an overlapping generation model (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2012059
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