Weakening Transferable Utility: the Case of Non-intersecting Pareto Curves

Thomas Demuynck and Tom Potoms

ULB Institutional Repository from ULB -- Universite Libre de Bruxelles

Abstract: Transferable utility (TU) is a widely used assumption in economics. In this paper, we weaken the TU property to a setting where distinct Pareto frontiers have empty intersections. We call this the no-intersection property (NIP). We show that the NIP is strictly weaker than TU, but still allows to derive several desirable properties. We discuss the NIP in relation to several models where TU has turned out to be a key assumption: models of assortative matching, principal-agent models with asymmetric information, the Coase Independence Property and Becker's Rotten Kid Theorem.

Keywords: Assortative matching; Coase Independence Property; Pareto efficiency; Rotten Kid Theorem; Transferable utility (search for similar items in EconPapers)
Date: 2020-04-01
New Economics Papers: this item is included in nep-upt
Note: SCOPUS: ar.j
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Citations: View citations in EconPapers (2)

Published in: Journal of Economics Theory (2020) v.188

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Related works:
Journal Article: Weakening transferable utility: The case of non-intersecting Pareto curves (2020)
Working Paper: Weakening Transferable Utility: the Case of Non-intersecting Pareto Curves (2018)
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