Dividing bads under additive utilities

We compare the Egalitarian rule (aka Egalitarian Equivalent) and the Competitive rule (aka Comeptitive Equilibrium with Equal Incomes) to divide bads (chores). They are both welfarist: the competitive disutility profile(s) are the critical points of their Nash product on the set of efficient feasible profiles. The C rule is Envy Free, Maskin Monotonic, and has better incentives properties than the E rule. But, unlike the E rule, it can be wildly multivalued, admits no selection continuous in the utility and endowment parameters, and is harder to compute. Thus in the division of bads, unlike that of goods, no rule normatively dominates the other

Monotonicity and Competitive Equilibrium in Cake-cutting

We study the monotonicity properties of solutions in the classic problem of fair cake-cutting --- dividing a heterogeneous resource among agents with different preferences. Resource- and population-monotonicity relate to scenarios where the cake, or the number of participants who divide the cake, changes. It is required that the utility of all participants change in the same direction: either all of them are better-off (if there is more to share or fewer to share among) or all are worse-off (if there is less to share or more to share among). We formally introduce these concepts to the cake-cutting problem and examine whether they are satisfied by various common division rules. We prove that the Nash-optimal rule, which maximizes the product of utilities, is resource-monotonic and population-monotonic, in addition to being Pareto-optimal, envy-free and satisfying a strong competitive-equilibrium condition. Moreover, we prove that it is the only rule among a natural family of welfare-maximizing rules that is both proportional and resource-monotonic.Comment: Revised versio

Competitive division of a mixed manna

A mixed manna contains goods (that everyone likes) and bads (that everyone dislikes), as well as items that are goods to some agents, but bads or satiated to others. If all items are goods and utility functions are homogeneous of degree 1 and concave (and monotone), the competitive division maximizes the Nash product of utilities (Gale–Eisenberg): hence it is welfarist (determined by the set of feasible utility profiles), unique, continuous, and easy to compute. We show that the competitive division of a mixed manna is still welfarist. If the zero utility profile is Pareto dominated, the competitive profile is strictly positive and still uniquely maximizes the product of utilities. If the zero profile is unfeasible (for instance, if all items are bads), the competitive profiles are strictly negative and are the critical points of the product of disutilities on the efficiency frontier. The latter allows for multiple competitive utility profiles, from which no single-valued selection can be continuous or resource monotonic. Thus the implementation of competitive fairness under linear preferences in interactive platforms like SPLIDDIT will be more difficult when the manna contains bads that overwhelm the goods

Equity and economic theory: reflections on methodology and scope

This paper provides an introduction to the recent literature on ordinal distributive justice. Its objetive is to explain the process of the mathematical analysis of fairness and to consider its potential for solving real allocative problems by means of several illustrative examples