Fair Division With Uncertain Needs and Tastes

Leigh Tesfatsion (tesfatsi@iastate.edu)

Staff General Research Papers Archive from Iowa State University, Department of Economics

Abstract: This article examines the extent to which utilitarian social welfare maximization results in an egalitarian outcome for the classic n-agent cake-cutting problem when the agents are characterized by heterogenous subsistence needs as well as by heterogeneous tastes. It is shown that utilitarian social welfare maximization results in surplus-egalitarianism---i.e., first meeting needs, then equally dividing the remaining cake---when tastes are uncertain but needs are known, can be met, and are required to be met by prior restriction. If the meeting of needs is not imposed as a lexicographically prior principal of fairness, however, then---due to the fundamental non-concavity of individual agent utility functions resulting from the introduction of subsistence needs---utilitarian social welfare maximization requires that agents with high subsistence needs be allowed to die with zero shares as a matter of general policy. Moreover, when needs and tastes are both uncertain, an egalitarian allocation only results if the meaning of subsistence needs is suitably weakened to a poverty line definition. Annotated pointers to related work can be accessed here: http://www2.econ.iastate.edu/tesfatsi/dehome.htm

Keywords: social welfare maximization; fair division; cake-cutting problem (search for similar items in EconPapers)
JEL-codes: C7 D6 D7 (search for similar items in EconPapers)
Date: 1985-01-01
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Citations: View citations in EconPapers (1)

Published in Social Choice and Welfare 1985, vol. 2, pp. 295-309

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Persistent link: https://EconPapers.repec.org/RePEc:isu:genres:11207

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