Abstract
This paper analyses the problems arising in the pure exchange fair division model, when some dimensions of the resources are personal, fixed, and cannot be redistributed. The remaining resources must then be allocated in a compensatory way. A set of desirable normative properties is defined. No-envy satisfies these properties, but is not generally non-empty in this setting and other criteria are examined, for which existence results are given. General impossibility results obtain. In particular, it is generally impossible to compensate fully and only for differential personal resources, when preferences differ.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Alkan, A., Demange, G. and Gale, D.: 1991, ‘Fair allocations of indivisible goods and criteria of justice’,Econometrica 59(4), 1023–1040.
Arneson, R. J.: 1989, ‘Equality and equal opportunity for welfare’,Philosophical Studies 56, 77–93.
Aumann, R. and Maschler, M.: 1985, ‘Game theoretic analysis of a bankruptcy problem from the Talmud’,Journal of Economic Theory 36, 195–213.
Border, K. C.: 1985,Fixed Point Theorems with Applications to Economics and Game Theory, Cambridge U. Press, Cambridge.
Champsaur, P. and Laroque, G.: 1981, ‘Fair allocations in large economies’,Journal of Economic Theory 25, 269–282.
Chun, Y.: 1988, ‘The proportional solution for rights problems’,Mathematical Social Sciences 15, 231–246.
Cohen, G. A.: 1989, ‘On the currency of egalitarian justice’,Ethics 99, 906–944.
Daniel, T. E.: 1975, ‘A revised concept of distributional equity’,Journal of Economic Theory 11, 94–109.
Diamantaras, D. and Thomson, W.: 1990, ‘A refinement and extension of the no-envy concept’,Economic Letters 33, 217–222.
Dworkin, R.: 1981, ‘What is Equality? Part 2: Equality of Resources’,Philosophy and Public Affairs 10(4), 283–345.
Feldman, A. and Kirman, A.: 1974, ‘Fairness and envy’,American Economic Review 64(6), 995–1005.
Fleurbaey, M.: 1992, ‘The requisites of equal opportunity’, forthcoming in W. Barnett, H. Moulin, M. Salles and N. Schofield, eds.,Advances in Social Choice Theory and Cooperative Games, Cambridge U. Press, Cambridge.
Fleurbaey, M.: 1993, ‘Three solutions for the compensation problem’, forthcoming inJournal of Economic Theory.
Fleurbaey, M. and Maniquet, F.: 1993, ‘Fair allocations with unequal skills’, mimeo.
Foley, D.K.: 1967, ‘Resource allocation and the public sector’,Yale Economic Essays 7, 45–98.
Goldman, S. and Sussangkarn, C.: 1983, ‘Dealing with envy’,Journal of Public Economics 22, 103–112.
Harsayni, J. C.: 1976,Essays on Ethics, Social Behavior, and Scientific Explanation, Reidel, Dordrecht.
Iturbe, I. and Nieto, J.: 1992, ‘On fair allocations and monetary compensations’, mimeo.
Kolm, S. C.: 1972,Justice et Equité, Editions du CNRS, Paris.
Kolm, S. C.: 1991, ‘The ethical economics of envy’, mimeo.
Littlechild, S. C. and Owen, G.: 1973, ‘A simple expression for the Shaley value in a special case’,Management Science 20, 370–372.
Maskin, E.: 1987, ‘On the fair allocation of indivisible goods’, in G. R. Feiwel (Ed.),Arrow and the Foundations of the Theory of Economic Policy, Macmillan Press, London.
Moulin, H.: 1991, ‘Stand alone and unanimity tests: A reexamination of fair division’, Workshop on Ethics and Economics, University of Siena, July 1991.
O'Neill, B.: 1982, ‘A problem of rights arbitration in the Talmud’,Mathematical Social Sciences 2, 345–371.
Pazner, E.: 1977, ‘Pitfalls in the theory of fairness’,Journal of Economic Theory 14, 458–466.
Pazner, E. and Schmeidler, D.: 1974, ‘A difficulty in the concept of fairness’,Review of Economic Studies 41, 441–443.
Pazner, E. and Schmeidler, D.: 1978, ‘Egalitarian-equivalent allocations: A new concept of economic equity’,Quarterly Journal of Economics 92, 671–687.
Rawls, J.: 1971,A Theory of Justice, Harvard University Press, Cambridge.
Roemer, J. E.: 1985a, ‘Equality of talent’,Economics and Philosophy 1, 151–187.
Roemer, J. E.: 1985b, ‘A note on interpersonal comparability and the theory of fairness’, Working Paper No. 261, Department of Economics, University of California, Davis.
Roemer, J. E.: 1986, ‘Equality of resources implies equality of welfare’,Quarterly Journal of Economics 101, 751–784.
Sen, A.: 1987,On Ethics and Economics, Basil Blackwell, Oxford.
Svensson, L. G.: 1983, ‘Large indivisibles: An analysis with respect to price equilibrium and fairness’,Econometrica 51, 939–954.
Thomson, W.: 1990, ‘Equity concepts in economics’, mimeo, University of Rochester.
Thomson, W. and Varian, H.: 1985, ‘Theories of justice based on symmetry, in L. Hurwicz, D. Schmeidler and H. Sonnenschein (Eds.),Social Goals and Social Organizations, Cambridge U. Press, Cambridge.
Van Parijs, P.: 1990, ‘Equal endowments as undominated diversity’,Recherches Economiques de Louvain 56, 327–355.
Varian, H.: 1974, ‘Equity, envy and efficiency’,Journal of Economic Theory 9, 63–91.
Varian, H.: 1975, ‘Distributive justice, welfare economics, and the theory of fairness’,Philosophy of Public Affairs 4(3), 223–247.
Young, H. P.: 1987, ‘On dividing an amount according to individual claims or liabilities’,Mathematics of Operations Research 12, 398–414.
Zeckhauser, R.: 1974, ‘Risk spreading and distribution’, in H. M. Hochman and G. E. Peterson (Eds.),Redistribution through Public Choice, New York: Columbia University Press.
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
Fleurbaey, M. On fair compensation. Theor Decis 36, 277–307 (1994). https://doi.org/10.1007/BF01079932
Issue Date:
DOI: https://doi.org/10.1007/BF01079932