This paper introduces and develops the concept of “conditional agreement point”, defined as the dominating issue (hard optimality) within a certain restricted subset of the set of feasible issues (partial optimality). Such a concept associates individualistic independence (via the operation...

We study the problem of assigning indivisible goods to individuals where each is to receive one object. To guarantee fairness in the absence of monetary compensation, we consider random assignments and analyse various equity criteria for such lotteries. In particular, we find that sd-no-envy (as...

We study the problem of assigning indivisible goods to individuals where each is to receive one object. To guarantee fairness in the absence of monetary compensation, we consider random assignments and analyse various equity criteria for such lotteries. In particular, we find that sd-no-envy (as...

This chapter reviews the theory of the voluntary public and private redistribution of wealth elaborated by economic analysis in the last forty years or so. The central object of the theory is altruistic gift-giving, construed as benevolent voluntary redistribution of income or wealth. The theory...

The excessive compensation packages of CEOs of U.S. corporations in recent years have brought the issue of fairness to the foreground in economics. The conventional wisdom is that the free market for labor, which determines the pay packages, cares only about efficiency and not fairness. We...

The eductive approach consists of finding solutions consistent with common knowledge of individual rationality and the model. An equilibrium is stable whenever it is the unique outcome consistent with these assumptions. This is a strong stability criterion as it relies on no assumption of prior...

The rational expectations equilibrium (REE), as introduced in Radner (1979) in a general equilibrium setting à la Arrow–Debreu–McKenzie, often fails to have desirable properties such as universal existence, incentive compatibility and efficiency. We resolve those problems by providing a new...

An analysis of the disease of formalism in modern economics. Its manifestation in general equilibrium theory, game theory, the new classical macroeconomics and real business cycle theory. Symptoms of the disease in the current vogue for postmodernism in methodololy. The possibilities for curing...

The paper introduces the assumption of costly information acquisition to the theory of mechanism design for matching allocation problems. It is shown that the assumption of endogenous information acquisition greatly changes some of the cherished results in that theory: in particular, the...

The paper introduces the assumption of costly information acquisition to the theory of mechanism design for matching allocation problems. It is shown that the assumption of endogenous information acquisition greatly changes some of the cherished results in that theory: in particular, the...