Allocation rules on networks

Rahmi İlkılıç and Cagatay Kayi

MPRA Paper from University Library of Munich, Germany

Abstract: When allocating a resource, geographical and infrastructural constraints have to be taken into account. We study the problem of distributing a resource through a network from sources endowed with the resource to citizens with claims. A link between a source and an agent depicts the possibility of a transfer from the source to the agent. Given the supplies at each source, the claims of citizens, and the network, the question is how to allocate the available resources among the citizens. We consider a simple allocation problem that is free of network constraints, where the total amount can be freely distributed. The simple allocation problem is a claims problem where the total amount of claims is greater than what is available. We focus on consistent and resource monotonic rules in claims problems that satisfy equal treatment of equals. We call these rules fairness principles and we extend fairness principles to allocation rules on networks. We require that for each pair of citizens in the network, the extension is robust with respect to the fairness principle. We call this condition pairwise robustness with respect to the fairness principle. We provide an algorithm and show that each fairness principle has a unique extension which is pairwise robust with respect to the fairness principle. We give applications of the algorithm for three fairness principles: egalitarianism, proportionality and equal sacrifice.

Keywords: Networks; Claims Problems; Egalitarianism; Proportionality; Equal Sacrifice (search for similar items in EconPapers)
JEL-codes: D61 D85 Q20 (search for similar items in EconPapers)
Date: 2012-03
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Related works:
Journal Article: Allocation rules on networks (2014)
Working Paper: Allocation rules on networks (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:37305

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