Randomization, revelation, and redistribution in a Lerner world

B-Tier
Journal: Economic Theory
Year: 2002
Volume: 20
Issue: 3
Pages: 539-553

Authors (3)

Uri Possen (not in RePEc) Pierre Pestieau (Université de Liège) Steven Slutsky (not in RePEc)

Score contribution per author:

0.670 = (α=2.01 / 3 authors) × 1.0x B-tier

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

Abstract

If total social income is fixed and a social planner is uninformed of the utility representations of different individuals, then Lerner showed that the social optimum is to equally distribute income across individuals. We show that the planner by the use of randomization can in some circumstances induce individuals to reveal information about the curvature of their utility functions and then use the information to move away from equality on average. However, whether this is optimal depends in part on unobservable beliefs of the planner. These may be viewed as an aspect of the planner's ethical judgements or as something entirely arbitrary.

Technical Details

RePEc Handle
repec:spr:joecth:v:20:y:2002:i:3:p:539-553
Journal Field
Theory
Author Count
3
Added to Database
2026-01-29