Equitable nature of core allocations in atomless economies

AbstractIn this paper, we study the problem of a fair redistribution of resources among agents in an exchange economy á la Shitovitz (Econometrica 41:467–501, 1973), with agents’ measure space having both atoms and an atomless sector. We proceed by following the idea of Aubin (Mathematical methods of game economic theory. North-Holland, Amsterdam, New York, Oxford, 1979) to allow for partial participation of individuals in coalitions, that induces an enlargement of the set of ordinary coalitions to the so-called fuzzy or generalized coalitions. We propose a notion of fairness which, besides efficiency, imposes absence of envy towards fuzzy coalitions, and which fully characterizes competitive equilibria and Aubin-core allocations.

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On the inequitable nature of core allocations

Journal of Economic Theory ◽

10.1016/0022-0531(72)90144-5 ◽

1972 ◽

Vol 4 (2) ◽

pp. 132-143 ◽

Cited By ~ 22

Author(s):

Jerry R Green

Keyword(s):

Core Allocations

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Blocking Coalitions and Fairness in Asset Markets and Asymmetric Information Economies

The B E Journal of Theoretical Economics ◽

10.1515/bejte-2018-0139 ◽

2019 ◽

Vol 20 (1) ◽

Author(s):

Anuj Bhowmik ◽

Maria Gabriella Graziano

Keyword(s):

Asymmetric Information ◽

Status Quo ◽

Veto Power ◽

Asset Markets ◽

The Core ◽

Information Models ◽

The Status ◽

Initial Improvement ◽

Core Allocations ◽

Asymmetric Information Economies

AbstractThis paper analyses two properties of the core in a two-period exchange economy under uncertainty: the veto power of arbitrary sized coalitions; and coalitional fairness of core allocations. We study these properties in relation to classical (static) and sequential (dynamic) core notions and apply our results to asset markets and asymmetric information models. We develop a formal setting where consumption sets have no lower bound and impose a series of general restrictions on the first period trades of each agent. All our results are applications of the same lemma about improvements to an allocation that is either non-core or non-coalitionally fair. Roughly speaking, the lemma states that if all the members of a coalition achieve a better allocation in some way (for instance, by blocking the status quo allocation or because they envy the net trade of other coalitions) then an alternative improvement can be obtained through a perturbation of the initial improvement.

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