We investigate the fairness property of equal-income Walrasian allocations in exchange economies with a space of agents that may contain non-negligible (large) traders. We propose a "local" notion of fairness by requiring absence of envy only among agents who are "related" each other. We first characterize the equilibria under perfect competition. Then we investigate the role of large traders and we show that any equal-income Walrasian allocation is fair, but a fair allocation might not be supported by an equilibrium price. Finally, we provide two sufficient conditions under which, in spite of imperfect competition, a redistribution of resources is fair if and only if it results from a competitive mechanism.
Fairness and equilibria / Pesce, M.. - (2019).
Fairness and equilibria
M. Pesce
2019
Abstract
We investigate the fairness property of equal-income Walrasian allocations in exchange economies with a space of agents that may contain non-negligible (large) traders. We propose a "local" notion of fairness by requiring absence of envy only among agents who are "related" each other. We first characterize the equilibria under perfect competition. Then we investigate the role of large traders and we show that any equal-income Walrasian allocation is fair, but a fair allocation might not be supported by an equilibrium price. Finally, we provide two sufficient conditions under which, in spite of imperfect competition, a redistribution of resources is fair if and only if it results from a competitive mechanism.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
