Pareto Optimal Allocations and Optimal Risk Sharing for Quasiconvex Risk Measures

2013 ◽  
Author(s):  
Elisa Mastrogiacomo ◽  
Emanuela Rosazza Gianin
Keyword(s):  
Risk Sharing ◽  
Risk Measures ◽  
Pareto Optimal ◽  
Optimal Allocations ◽  
Pareto Optimal Allocations ◽  
Optimal Risk Sharing

Experimental Stock Markets with Controlled Risk Preferences

1992 ◽  
Vol 7 (2) ◽  
pp. 117-134 ◽  
Author(s):  
John R. O'Brien
Keyword(s):  
Risk Sharing ◽  
Competitive Equilibrium ◽  
Risk Preferences ◽  
World Market ◽  
Equilibrium Price ◽  
Double Auction ◽  
Pareto Optimal ◽  
Market Institution ◽  
Certainty Equivalents ◽  
Optimal Risk Sharing

In this paper the empirical validity of the binary lottery preference inducing technique is tested in a real world market institution. In each market the potential gains to exchange arise from induced risk preferences, and the predicted competitive equilibrium is equivalent to the Pareto optimal risk sharing allocation. Price convergence to (and near) the competitive equilibrium price was rapid in each market, and most trades were individually rational with respect to induced certainty equivalents. This evidence implies that preferences can be induced in an oral double auction institution, using this technique.

On comonotonicity of Pareto optimal risk sharing

2008 ◽  
Vol 78 (10) ◽  
pp. 1181-1188 ◽  
Author(s):  
Michael Ludkovski ◽  
Ludger Rüschendorf
Keyword(s):  
Risk Sharing ◽  
Pareto Optimal ◽  
Optimal Risk Sharing

DON and Shapley Value for Allocation among Cooperating Agents in a Network: Conditions for Equivalence

2017 ◽  
Vol 5 (2) ◽  
pp. 143-161 ◽  
Author(s):  
Sridhar Mandyam ◽  
Usha Sridhar
Keyword(s):  
Social Welfare ◽  
Shapley Value ◽  
Centrality Measures ◽  
Pareto Optimal ◽  
Undirected Network ◽  
Social Welfare Maximization ◽  
Optimal Allocations ◽  
Game Theoretic ◽  
Cooperating Agents ◽  
Pareto Optimal Allocations

In a paper appearing in a recent issue of this journal ( Studies in Microeconomics), the authors explored a new method to allocate a divisible resource efficiently among cooperating agents located at the vertices of a connected undirected network. It was shown in that article that maximizing social welfare of the agents produces Pareto optimal allocations, referred to as dominance over neighbourhood (DON), capturing the notion of dominance over neighbourhood in terms of network degree. In this article, we show that the allocation suggested by the method competes well with current cooperative game-theoretic power centrality measures. We discuss the conditions under which DON turns exactly equivalent to a recent ‘fringe-based’ Shapley Value formulation for fixed networks, raising the possibility of such solutions being both Pareto optimal in a utilitarian social welfare maximization sense as well as fair in the Shapley value sense.

The Paradox of Vote Trading

1973 ◽  
Vol 67 (4) ◽  
pp. 1235-1247 ◽  
Author(s):  
William H. Riker ◽  
Steven J. Brams
Keyword(s):  
Stable Equilibrium ◽  
Pareto Optimal ◽  
External Cost ◽  
Optimal Allocations ◽  
Vote Trading ◽  
Pareto Optimal Allocations

Although, conventionally, vote trading in legislatures has been condemned as socially undesirable by both scholars and lay citizens, a recently popular school of scholarship has argued that vote trading improves the traders' welfare in the direction of Pareto-optimal allocations. This essay is an attempt to reconcile the disagreement by showing formally that vote trading does improve the position of the traders but that at the same time trading may impose an external cost on nontraders. In sum, it turns out that sporadic and occasional trading is probably socially beneficial but that systematic trading may engender a paradox of vote trading. This paradox has the property that, while trading is immediately advantageous for the traders, still, when everybody trades, everybody is worse off. Furthermore, vote trading may not produce a stable equilibrium that is Pareto-optimal either for individual members or for coalitions of members.

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