Equity and efficiency in an overlapping generation model
(2012)
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- Abstract
- The paper addresses intergenerational and intragenerational equity in an overlapping generation economy. We aim at defining an egalitarian distribution of a constant stream of resources, when preferences are ordinal and non-comparable. We establish the impossibility of efficiently distributing resources while treating equally agents with same preferences that belong to possibly different generations. We thus propose an egalitarian criterion based on the equal-split guarantee: this requires all agents to find their assigned consumption bundle at least as desirable as the equal division of resources. Finally, we show how to construct a cardinalization of the preferences that enables well-being comparisons: this allows defining the family of critical-level utilitarian orderings that top-rank the egalitarian solution.
- Affiliations
Citations
Isaac, T., & Piacquadio, P. G. (2012). Equity and efficiency in an overlapping generation model (CORE Discussion Paper 2012/59). https://hdl.handle.net/2078.5/204996