A fair solution to the compensation problem
(2007)
Files
2007-38.pdf
Open Access - Adobe PDF
- 657.71 KB
Details
- Authors
- Abstract
- We study equity in economies where agents are endowed with different, non transferable, personal talents. To compensate them for such differences a given amount of money needs to be shared among them. We axiomatize a family of social orderings over allocations based on efficiency, fairness and robustness properties. Taking into account incentive constraints we derive the optimal policy: individuals with the same talent need to be equally compensated and only people whose level of talent is below a certain threshold should receive a positive compensation.
- Affiliations
Citations
Valletta, G. (2007). A fair solution to the compensation problem (ECON Discussion Papers 2007/38). https://hdl.handle.net/2078.5/129372