The Pure Compensation Problem: Egalitarianism Versus Laissez-Fairism

S-Tier
Journal: Quarterly Journal of Economics
Year: 1987
Volume: 102
Issue: 4
Pages: 769-783

Score contribution per author:

8.043 = (α=2.01 / 1 authors) × 4.0x S-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

A binary choice problem with side-payments and quasi-linear utilities is considered. We study two compensation rules, called social choice functions. The egalitarian rule divides equally the surplus above the average utility level. The laissez-faire rule chooses an efficient decision but performs no transfer. Egalitarianism is characterized by a monotonicity axiom called Agreement: no two agents ever disagree in comparing two distinct preferences of a third one. Laissez-fairism is characterized by the No Subsidy axiom: a coalition would not be worse off if the other agents were not present.

Technical Details

RePEc Handle
repec:oup:qjecon:v:102:y:1987:i:4:p:769-783.
Journal Field
General
Author Count
1
Added to Database
2026-01-26