Fairness and efficiency for probabilistic allocations with endowments release_m46ffg4nvvdfrfoqtwgvo7iaie

by Federico Echenique and Antonio Miralles and Jun Zhang

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We propose a notion of fairness for allocation problems in which different agents may have different endowments. Fairness is usually understood as the absence of envy, but when agents differ in endowments it is impossible to rule out envy without violating property rights. Instead we seek to rule out justified envy, defined as envy for which the remedy would not violate any agent's property rights. We show that fairness, meaning the absence of justified envy, can be achieved together with efficiency and individual rationality (respect for property rights). Our approach requires standard assumptions on agents' preferences, and is compatible with quantity constraints on allocations. The main application of our results is to school choice, where we can simultaneously achieve fairness, efficiency, and diversity-motivated quantity constraints.
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Type  article
Stage   submitted
Date   2019-08-31
Version   v2
Language   en ?
arXiv  1908.04336v2
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