Fair division and collective welfare / Hervé Moulin.

Includes bibliographical references (pages 277-280) and index.

Print version record.

The concept of fair division is as old as civil society itself. Aristotle's "equal treatment of equals" was the first step toward a formal definition of distributive fairness. The concept of collective welfare, more than two centuries old, is a pillar of modern economic analysis. Reflecting fifty years of research, this book examines the contribution of modern microeconomic thinking to distributive justice. Taking the modern axiomatic approach, it compares normative arguments of distributive justice and their relation to efficiency and collective welfare.The book begins with the epistemological status of the axiomatic approach and the four classic principles of distributive justice: compensation, reward, exogenous rights, and fitness. It then presents the simple ideas of equal gains, equal losses, and proportional gains and losses. The book discusses three cardinal interpretations of collective welfare: Bentham's "utilitarian" proposal to maximize the sum of individual utilities, the Nash product, and the egalitarian leximin ordering. It also discusses the two main ordinal definitions of collective welfare: the majority relation and the Borda scoring method.The Shapley value is the single most important contribution of game theory to distributive justice. A formula to divide jointly produced costs or benefits fairly, it is especially useful when the pattern of externalities renders useless the simple ideas of equality and proportionality. The book ends with two versatile methods for dividing commodities efficiently and fairly when only ordinal preferences matter: competitive equilibrium with equal incomes and egalitarian equivalence. The book contains a wealth of empirical examples and exercises.

Microeconomic Foundations -- Fairness: Equal and Unequal Treatment -- Collective Welfare: Cardinal -- Collective Welfare: Ordinal -- Externalities and Fair Division -- Private versus Public Contracts -- Organization and Overview of the Book -- Fair Distribution -- Four Principles of Distributive Justice -- A Simple Model of Fair Distribution -- Contested Garment Method -- Equal Sacrifice in Taxation -- Sum-Fitness and Equality -- Cardinal Welfarism -- Welfarism -- Additive Collective Utility Functions -- Egalitarianism and the Leximin Social Welfare Ordering -- Comparing Classical Utilitarianism, Nash, and Leximin -- Failures of Monotonicity -- Bargaining Compromise -- Voting and Social Choice -- Ordinal Welfarism -- Condorcet versus Borda -- Voting over Resource Allocation -- Single-Peaked Preferences -- Intermediate Preferences -- Preference Aggregation and Arrow's Theorem -- The Shapley Value -- The Problem of the Commons and Two Examples -- The Shapley Value: Definition -- The Stand-alone Test and Stand-alone Core -- Stand-alone Surplus -- Axiomatizations of the Shapley Value -- Managing the Commons -- The Tragedy of the Commons -- Constant Returns to Scale -- Fair Compensation: Three Interpretations -- Free Access versus Random Priority: Decreasing Returns -- Increasing Returns -- Axiomatic Comparison of the Three Solutions -- Fair Trade and Fair Division -- Private Ownership and Competitive Trade -- Imperfect Competition -- Destructive Competition -- No Envy and the Assignment Problem.

eBooks on EBSCOhost EBSCO eBook Subscription Academic Collection - Worldwide