Characterizing welfare-egalitarian mechanisms with solidarity when valuations are private information

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2012

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Yengin, D.

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B.E. Journal of Theoretical Economics, The, 2012; 12(1):12-12

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Duygu Yengin

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Abstract

In the problem of assigning indivisible goods and monetary transfers, we characterize welfare-egalitarian mechanisms (that are decision-efficient and incentive compatible) with an axiom of solidarity under preference changes and a fair ranking axiom of order preservation. This result is in line with characterizations of egalitarian rules with solidarity in other economic models. We also show that we can replace order-preservation with egalitarian-equivalence or no-envy (on the subadditive domain) and still characterize the welfare-egalitarian class. However, if we weaken order preservation to symmetry, mechanisms that are not welfare-egalitarian exist. We also study upper bounds on deficit and welfare lower bounds that characterize subclasses of the welfare-egalitarian class.

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