Equity, envy and efficiency under asymmetric information

Varian's (Varian, H., 1974. Equity, Envy and Efficiency. Journal of Economic Theory 9, 63–91) main results are not valid anymore if the agents are asymmetrically informed at the time of contracting: 1) envy-freeness and efficiency may be incompatible; 2) there may exist efficient allocation rul...

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Bibliographic Details
Published in:Economics letters 2008-05, Vol.99 (2), p.265-267
Main Author: de Clippel, Geoffroy
Format: Article
Language:English
Subjects:
Asymmetric information
Economic efficiency
Efficiency
Envy
Equality
Equity
Fairness
Resource allocation
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Summary:Varian's (Varian, H., 1974. Equity, Envy and Efficiency. Journal of Economic Theory 9, 63–91) main results are not valid anymore if the agents are asymmetrically informed at the time of contracting: 1) envy-freeness and efficiency may be incompatible; 2) there may exist efficient allocation rules such that every agent envies another. Two weaker positive properties are formulated.
ISSN:0165-1765
1873-7374
DOI:10.1016/j.econlet.2007.07.022