Economic Theory

, Volume 63, Issue 3, pp 755–781

Endowment additivity and the weighted proportional rules for adjudicating conflicting claims

Research Article

Abstract

We propose and study a new axiom, restricted endowment additivity, for the problem of adjudicating conflicting claims. This axiom requires that awards be additively decomposable with respect to the endowment whenever no agent’s claim is filled. For two-claimant problems, restricted endowment additivity essentially characterizes weighted extensions of the proportional rule. With additional agents, however, the axiom is satisfied by a great variety of rules. Further imposing versions of continuity and consistency, we characterize a new family of rules which generalize the proportional rule. Defined by a priority relation and a weighting function, each rule aims, as nearly as possible, to assign awards within each priority class in proportion to these weights. We also identify important subfamilies and obtain new characterizations of the constrained equal awards and proportional rules based on restricted endowment additivity.

Keywords

Claims problem restricted endowment additivity Weighted proportional rule Priority-augmented weighted proportional rule 

JEL Classification

D63 D70 D71 

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Copyright information

© Springer-Verlag Berlin Heidelberg 2016

Authors and Affiliations

  1. 1.Department of EconomicsUniversity of RochesterRochesterUSA

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