Value Preserving Welfare Weights for Social Optimization

Alexis Anagnostopoulos, Eva Carceles-Poveda and Yair Tauman ()

Department of Economics Working Papers from Stony Brook University, Department of Economics

Abstract: We propose a method to endogenize social welfare weights. We provide three axioms which uniquely determine the contribution of a bundle of goods to a welfare function. We define weights to be value preserving (VP) if the contribution of an individual to social welfare is proportional to the contribution of the final allocation to the individual's welfare. We show that VP weights coincide with Negishi weights in Arrow-Debreu economies. With wealth heterogeneity, VP weights prescribe higher than capital labor taxes even for extreme inequality levels. With ability differences, VP weights redistribute towards high ability, high effort and low wealth types.

Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.stonybrook.edu/commcms/economics/resea ... 018/shapley_1808.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nys:sunysb:18-08

Access Statistics for this paper

More papers in Department of Economics Working Papers from Stony Brook University, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by ().