The pure compensation problem: egalitarianism versus laissez-fairism

Moulin, H. (1987) The pure compensation problem: egalitarianism versus laissez-fairism. Quarterly Journal of Economics, 102(4), pp. 769-783. (doi: 10.2307/1884280)

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A binary choice problem with side-payments and quasi-linear utilities is considered. We study two compensation rules, called social choice functions. The egalitarian rule divides equally the surplus above the average utility level. The laissez-faire rule chooses an efficient decision but performs no transfer. Egalitarianism is characterized by a monotonicity axiom called Agreement: no two agents ever disagree in comparing two distinct preferences of a third one. Laissez-fairism is characterized by the No Subsidy axiom: a coalition would not be worse off if the other agents were not present.

Item Type:Articles
Glasgow Author(s) Enlighten ID:Moulin, Professor Herve
Authors: Moulin, H.
College/School:College of Social Sciences > Adam Smith Business School > Management
Journal Name:Quarterly Journal of Economics
ISSN (Online):1531-4650

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