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Fair Division and Collective Welfare : The MIT Press - Herve J. Moulin

Fair Division and Collective Welfare

The MIT Press

Paperback Published: 20th August 2004
ISBN: 9780262633116
Number Of Pages: 295
For Ages: 18+ years old

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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.

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"Herve Moulin is one of the deepest thinkers in welfare economics. His book on fair division is an elegant overview of modern contributions to an ancient problem." - Eric S. Maskin, A. O. Hirschman Professor of Social Science, Institute for Advanced Study

Microeconomic Foundationsp. 1
Fairness: Equal and Unequal Treatmentp. 1
Collective Welfare: Cardinalp. 3
Collective Welfare: Ordinalp. 6
Externalities and Fair Divisionp. 9
Private versus Public Contractsp. 13
Organization and Overview of the Bookp. 15
Introduction to the Literaturep. 18
Fair Distributionp. 21
Four Principles of Distributive Justicep. 21
A Simple Model of Fair Distributionp. 27
Contested Garment Methodp. 37
Equal Sacrifice in Taxationp. 41
Sum-Fitness and Equalityp. 44
Introduction to the Literaturep. 51
Exercises to Chapter 2p. 52
Cardinal Welfarismp. 63
Welfarismp. 63
Additive Collective Utility Functionsp. 66
Egalitarianism and the Leximin Social Welfare Orderingp. 70
Comparing Classical Utilitarianism, Nash, and Leximinp. 76
Failures of Monotonicityp. 81
Bargaining Compromisep. 86
Introduction to the Literaturep. 95
Exercises to Chapter 3p. 96
Voting and Social Choicep. 107
Ordinal Welfarismp. 107
Condorcet versus Bordap. 110
Voting over Resource Allocationp. 116
Single-Peaked Preferencesp. 118
Intermediate Preferencesp. 122
Preference Aggregation and Arrow's Theoremp. 126
Introduction to the Literaturep. 130
Exercises to Chapter 4p. 131
The Shapley Valuep. 139
The Problem of the Commons and Two Examplesp. 139
The Shapley Value: Definitionp. 143
The Stand-alone Test and Stand-alone Corep. 147
Stand-alone Surplusp. 156
Axiomatizations of the Shapley Valuep. 159
Introduction to the Literaturep. 162
Exercises to Chapter 5p. 163
Managing the Commonsp. 169
The Tragedy of the Commonsp. 169
Constant Returns to Scalep. 173
Fair Compensation: Three Interpretationsp. 175
Free Access versus Random Priority: Decreasing Returnsp. 184
Increasing Returnsp. 190
Axiomatic Comparison of the Three Solutionsp. 199
Introduction to the Literaturep. 208
Exercises to Chapter 6p. 209
Fair Trade and Fair Divisionp. 221
Private Ownership and Competitive Tradep. 221
Imperfect Competitionp. 228
Destructive Competitionp. 232
No Envy and the Assignment Problemp. 235
The CEEI and Egalitarian Equivalent Solutionsp. 240
Axiomatics of Fair Divisionp. 248
Introduction to the Literaturep. 251
Exercises to Chapter 7p. 252
A Glossary of Definitions and Resultsp. 261
Referencesp. 277
Indexp. 281
Table of Contents provided by Ingram. All Rights Reserved.

ISBN: 9780262633116
ISBN-10: 0262633116
Series: The MIT Press
Audience: Professional
For Ages: 18+ years old
Format: Paperback
Language: English
Number Of Pages: 295
Published: 20th August 2004
Publisher: MIT Press Ltd
Country of Publication: US
Dimensions (cm): 22.23 x 17.15  x 1.91
Weight (kg): 0.44