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Are Asymmetrically Informed Individuals Irremediably Envious?
Author(s) -
Pesce Marialaura
Publication year - 2017
Publication title -
metroeconomica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.256
H-Index - 29
eISSN - 1467-999X
pISSN - 0026-1386
DOI - 10.1111/meca.12120
Subject(s) - economics , equity (law) , microeconomics , mechanism (biology) , focus (optics) , law , political science , physics , optics , philosophy , epistemology
In most economies, in particular in presence of uncertainty, a fair allocation does not exist. The main focus of this paper is on possibility of simultaneously resolving the equity and efficiency problems in economies with asymmetrically informed agents. We prove that if a cautious attitude towards uncertainty is socially accepted, then it is possible to have equitable and efficient allocations via a competitive equilibrium mechanism.