The Principle of Strong Kiminishing Transfer
Alain Chateauneuf (),
Thibault Gajdos () and
Papiers d'Economie MathÃ©matique et Applications from UniversitÃ© PanthÃ©on-Sorbonne (Paris 1)
In a seminal paper, Kolm  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  and Kakwani  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)
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Journal Article: The Principle of Strong Diminishing Transfer (2002)
Working Paper: The Principle of Strong Diminishing Transfer (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:fth:pariem:1999-96
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