Details
| Original language | English |
|---|---|
| Pages (from-to) | 28-45 |
| Number of pages | 18 |
| Journal | Journal of mathematical economics |
| Volume | 84 |
| Early online date | 8 Jun 2019 |
| Publication status | Published - Oct 2019 |
| Externally published | Yes |
Abstract
We study the problem of optimising the aggregated utility within a system of agents under the assumption that individual utility assessments are law-invariant: they rank Savage acts merely in terms of their distribution under a fixed reference probability measure. We present a unifying framework in which optimisers can be found which are comonotone allocations of an aggregated quantity. Our approach can be localised to arbitrary rearrangement invariant commodity spaces containing at least all bounded wealths. The aggregation procedure is a substantial degree of freedom in our study. Depending on the choice of aggregation, the optimisers of the optimisation problems are allocations of a wealth with desirable economic efficiency properties, such as (weakly, biased weakly, and individually rationally) Pareto efficient allocations, core allocations, and systemically fair allocations.
Keywords
- (Weak) Pareto efficiency, Comonotone improvement, Efficient allocations, Fair allocations, Law-invariant utilities
ASJC Scopus subject areas
- Economics, Econometrics and Finance(all)
- Economics and Econometrics
- Mathematics(all)
- Applied Mathematics
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In: Journal of mathematical economics, Vol. 84, 10.2019, p. 28-45.
Research output: Contribution to journal › Article › Research › peer review
}
TY - JOUR
T1 - Efficient allocations under law-invariance: A unifying approach
AU - Liebrich, Felix-Benedikt
AU - Svindland, Gregor
PY - 2019/10
Y1 - 2019/10
N2 - We study the problem of optimising the aggregated utility within a system of agents under the assumption that individual utility assessments are law-invariant: they rank Savage acts merely in terms of their distribution under a fixed reference probability measure. We present a unifying framework in which optimisers can be found which are comonotone allocations of an aggregated quantity. Our approach can be localised to arbitrary rearrangement invariant commodity spaces containing at least all bounded wealths. The aggregation procedure is a substantial degree of freedom in our study. Depending on the choice of aggregation, the optimisers of the optimisation problems are allocations of a wealth with desirable economic efficiency properties, such as (weakly, biased weakly, and individually rationally) Pareto efficient allocations, core allocations, and systemically fair allocations.
AB - We study the problem of optimising the aggregated utility within a system of agents under the assumption that individual utility assessments are law-invariant: they rank Savage acts merely in terms of their distribution under a fixed reference probability measure. We present a unifying framework in which optimisers can be found which are comonotone allocations of an aggregated quantity. Our approach can be localised to arbitrary rearrangement invariant commodity spaces containing at least all bounded wealths. The aggregation procedure is a substantial degree of freedom in our study. Depending on the choice of aggregation, the optimisers of the optimisation problems are allocations of a wealth with desirable economic efficiency properties, such as (weakly, biased weakly, and individually rationally) Pareto efficient allocations, core allocations, and systemically fair allocations.
KW - (Weak) Pareto efficiency
KW - Comonotone improvement
KW - Efficient allocations
KW - Fair allocations
KW - Law-invariant utilities
UR - http://www.scopus.com/inward/record.url?scp=85067180382&partnerID=8YFLogxK
U2 - 10.1016/j.jmateco.2019.05.002
DO - 10.1016/j.jmateco.2019.05.002
M3 - Article
VL - 84
SP - 28
EP - 45
JO - Journal of mathematical economics
JF - Journal of mathematical economics
SN - 0304-4068
ER -