Abstract
This paper studies efficient and egalitarian allocations over a single heterogeneous and infinitely divisible good. We prove the existence of such allocations using only measure-theoretic arguments. Under the additional assumption of complete information, we identify a sufficient condition on agents’ preferences that makes it possible to apply the Pazner–Schmeidler rule for uniquely selecting an efficient egalitarian equivalent allocation. Finally, we exhibit a simple procedure that implements the Pazner–Schmeidler selection in a subgame-perfect equilibrium.
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We thank Gabrielle Demange, William Thomson, two referees and seminar audiences at Boston, Palermo and Rochester University for their comments. Financial support from MIUR is acknowledged.
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LiCalzi, M., Nicolò, A. Efficient egalitarian equivalent allocations over a single good. Econ Theory 40, 27–45 (2009). https://doi.org/10.1007/s00199-008-0361-9
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DOI: https://doi.org/10.1007/s00199-008-0361-9