Compensation and sacrifice in the probabilistic rationing of indivisible units

Ricardo Martinez (ricardomartinez@ugr.es) and Juan Moreno-Ternero

No 22.01, Working Papers from Universidad Pablo de Olavide, Department of Economics

Abstract: We consider the problem of randomly allocating indivisible units of a resource among agents with conflicting claims on the resource. An axiom reflecting a principle of compensation allows us to characterize the focal probabilistic uniform awards rule. A dual axiom reflecting a principle of sacrifice allows us to characterize the (dual) probabilistic uniform losses rule. The combination of two (other) axioms reflecting both principles (of compensation and sacrifice) allows us to characterize the (compromise) probabilistic concede-and-divide in the two-agent case. There is, however, no consistent extension of this rule to the general case of an arbitrary number of agents.

Keywords: game theory; resource allocation; axioms; probabilistic; discrete goods (search for similar items in EconPapers)
JEL-codes: D63 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2022
New Economics Papers: this item is included in nep-des and nep-ore
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Compensation and sacrifice in the probabilistic rationing of indivisible units (2022)
Working Paper: Compensation and sacrifice in the probabilistic rationing of indivisible units (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:pab:wpaper:22.01

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