Subjectively Envy-Free Allocation: Characterization and Existence

We consider a framework in which each individual has his/her own concept of fairness and a social planner chooses an allocation that everyone feels fair. We say that an allocation is subjectively envy-free if no one envies the well-being of others under the allocation. We show that the subjectively envy-free allocation coincides, under different assumptions on individuals' information about others, with the well-known notions of fair allocation due to Rawls (1971) and Foley (1967). The result implies that depending on the circumstances of the society the concept of fairness changes. We also study conditions which guarantee the existence of a subjectively envy-free allocation.