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The Principle of Strong Kiminishing Transfer

Alain Chateauneuf (), Thibault Gajdos () and P.-H. Wilthien

Papiers d'Economie Mathématique et Applications from Université Panthéon-Sorbonne (Paris 1)

Abstract: In a seminal paper, Kolm [14] introduces the principle diminishing transfer. This principle requires that a transfert from an individual with income x to one with income x - D(D > 0) has a greater impact on social welfare the lower x is. On the other hand Mehran [15] and Kakwani [11] introduced another principle, namely the principle of dual diminishing transfer, which states that a transfer from an individual with rank i to one with rank (i - p) has a greater impact the lower i is. We give here necessary and sufficient conditions for a decision maker who behaves in accordance with dual Yaari's model to respect the principle of dual diminishing transfer. Unfortunately, it appears that if a decision maker who behaves in accordance with the RDEU model respects the principle of diminishing transfer, then he behaves in accordance with the EU model.

Keywords: INCOME; DISTRIBUTION; EQUITY; RISK (search for similar items in EconPapers)
JEL-codes: D31 D63 D71 D81 (search for similar items in EconPapers)
Date: 1999
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Journal Article: The Principle of Strong Diminishing Transfer (2002) Downloads
Working Paper: The Principle of Strong Diminishing Transfer (2002) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:fth:pariem:1999-96

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