Fair Knapsack

We study the following multiagent variant of the knapsack problem. We are given a set of items, a set of voters, and a value of the budget; each item is endowed with a cost and each voter assigns to each item a certain value. The goal is to select a subset of items with the total cost not exceeding the budget, in a way that is consistent with the voters' preferences. Since the preferences of the voters over the items can vary significantly, we need a way of aggregating these preferences, in order to select the socially best valid knapsack. We study three approaches to aggregating voters' preferences, which are motivated by the literature on multiwinner elections and fair allocation. This way we introduce the concepts of individually best, diverse, and fair knapsack. We study the computational complexity (including parameterized complexity, and complexity under restricted domains) of the aforementioned multiagent variants of knapsack.Comment: Extended abstract will appear in Proc. of 33rd AAAI 201

Risk Classification in Insurance Contracting

Risk classification refers to the use of observable characteristics by insurers to group individuals with similar expected claims, compute the corresponding premiums, and thereby reduce asymmetric information. An efficient risk classification system generates premiums that fully reflect the expected cost associated with each class of risk characteristics. This is known as financial equity. In the health sector, risk classification is also subject to concerns about social equity and potential discrimination. We present different theoretical frameworks that illustrate the potential trade-off between efficient insurance provision and social equity. We also review empirical studies on risk classification and residual asymmetric information.Adverse selection, classification risk, diagnostic test, empirical test of asymmetric information, financial equity, genetic test, health insurance, insurance rating, insurance pricing, moral hazard, risk classification, risk characteristic, risk pooling, risk separation, social equity

The Economics of Healthcare Rationing

This article examines the economics of healthcare rationing. We begin with an overview of the various dimensions across which healthcare rationing operates, or at least has the potential to operate, in the first place. We then describe the types of economic analyses used in healthcare rationing decision-making, with particular reference to cost-benefit analysis and cost-effectiveness analysis. We also discuss healthcare rationing in practice, such as how economic analyses inform decisions regarding which services to cover, and conclude by discussing various practical and conceptual challenges that may arise with economic analyses and that span both economics and ethics

Redividing the Cake

A heterogeneous resource, such as a land-estate, is already divided among several agents in an unfair way. It should be re-divided among the agents in a way that balances fairness with ownership rights. We present re-division protocols that attain various trade-off points between fairness and ownership rights, in various settings differing in the geometric constraints on the allotments: (a) no geometric constraints; (b) connectivity --- the cake is a one-dimensional interval and each piece must be a contiguous interval; (c) rectangularity --- the cake is a two-dimensional rectangle or rectilinear polygon and the pieces should be rectangles; (d) convexity --- the cake is a two-dimensional convex polygon and the pieces should be convex. Our re-division protocols have implications on another problem: the price-of-fairness --- the loss of social welfare caused by fairness requirements. Each protocol implies an upper bound on the price-of-fairness with the respective geometric constraints.Comment: Extended IJCAI 2018 version. Previous name: "How to Re-Divide a Cake Fairly

Self-Serving Dictators and Economic Growth

A new line of theoretical and empirical literature emphasizes the pivotal role of fair institutions for growth. We present a model, a laboratory experiment, and a simple cross-country regression supporting this view. We model an economy with an unequal distribution of property rights, in which individuals can free-ride or cooperate. Experimentally we observe a dramatic drop in cooperation (and growth), when inequality is increased by a selfserving dictator. No such effect is observed when the inequality is increased by a fair procedure. Our regression analysis provides basic macroeconomic support for the adverse growth effect of the interaction between the degree and the genesis of inequality. We conclude that economies giving equal opportunities to all are not likely to suffer retarded growth due to inequality in the way economies with self-serving dictators will.inequality, corruption, weak institutions, growth, intentions, dynamic public goods

Self-Serving Dictators and Economic Growth

A new line of theoretical and empirical literature emphasizes the pivotal role of fair institutions for growth.We present a model, a laboratory experiment, and a simple cross-country regression supporting this view.We model an economy with an unequal distribution of property rights, in which individuals can free-ride or cooperate.Experimentally we observe a dramatic drop in cooperation (and growth), when inequality is increased by a selfserving dictator.No such effect is observed when the inequality is increased by a fair procedure.Our regression analysis provides basic macroeconomic support for the adverse growth effect of the interaction between the degree and the genesis of inequality.We conclude that economies giving equal opportunities to all are not likely to suffer retarded growth due to inequality in the way economies with self-serving dictators will.economic growth;inequality;corruption;public goods