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Identifier to cite or link to this item: https://hdl.handle.net/10086/14533

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Title
Egalitarian-Equivalence and the Pareto Principle for Social Preferences
Creator
Creator Name
Tadenuma, Koichi Tadenuma, Koichi
蓼沼, 宏一 蓼沼, 宏一
タデヌマ, コウイチ タデヌマ, コウイチ
Affiliation
Affiliation Name
Hitotsubashi University
Editor
Contributor Name
世代間問題研究プロジェクト（世代間利害調整） = Setting Options for Fair Distribution of Well-being among Different Generations, Project on Intergenerational Equity
JEL
D71
D63
D61
Abstract
When we construct social preferences, the Pareto principle is often in conflict with the equity criteria: there exist two allocations x and y such that x Pareto dominates y, but y is an equitable allocation whereas x is not. The efficiency-first principle requires to rank an allocation x higher than y if (i) x Pareto dominates y or (ii) x and y are Pareto-noncomparable and x is equitable whereas y is not. The equity-first principle reverses the order of application of the two criteria. Adopting egalitarian-equivalence as the notion of equity, we examine rationality of the social preference functions based on the efficiency-first or the equity-first principle. The degrees of rationality vary widely depending on which principle is adopted, and depending on the range of egalitarian-reference bundles. We show several impossibility and possibility results as well as a characterization of the social preference function introduced by Pazner and Schmeidler (1978). We also identify the sets of maximal allocations of the social preference relations in an Edgeworth box. The results are contrasted with those in the case where no-envy is the notion of equity.
Description
This version: September 2002; First version: July 2002
Publisher
Institute of Economic Research, Hitotsubashi University
Issued Date
2002-12
Language
English(eng)
Resource Type
technical report
Version Type
VoR
Is Part OfRelation -
Related Title
Discussion Paper ; No. 128
NCID
AA11851730
Number of Pages
18
Sponsorship
科学研究費補助金（特定領域研究） = Grant-in-Aid for Scientific Research on Priority Areas
Appears in Collections
Discussion paper / Setting Options for Fair Distribution of Well-being among Different Generations, PIE
URL
https://hdl.handle.net/10086/14533