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The Principle of Strong Diminishing Transfer

Alain Chateauneuf (), Thibault Gajdos () and Pierre-Henry Wilthien
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Pierre-Henry Wilthien: CERMSEM - CEntre de Recherche en Mathématiques, Statistique et Économie Mathématique - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: We reconsider the principles of diminishing transfer (introduced by Kolm [1976]) and dual diminishing transfer (introduced by Mehran [1976]). It appears that if a Rank Dependent Expected Utility (RDEU) maximizer respects the principle of diminishing (resp. dual diminishing) transfer, then he behaves in accordance with the Expected Utility model (resp. Yaari's dual model).This leads us to define the principle of strong diminishing transfer, which is a combination of the principles of diminishing and dual diminishing transfer. We give necessary conditions for a RDEU maximizer to respect this principle.These results are applied to the problem of inequality measurement.

Keywords: Inequality Measurement; Principle of Diminishing Transfers (search for similar items in EconPapers)
Date: 2002
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00085936
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Published in Journal of Economic Theory, Elsevier, 2002, 103 (2), pp.311-333

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Related works:
Journal Article: The Principle of Strong Diminishing Transfer (2002) Downloads
Working Paper: The Principle of Strong Kiminishing Transfer (1999)
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