Equity in exchange economies

Abstract Let ψ be a “fair” choice correspondence, i.e., ψ associates to every economy in some initial position a set of final allocations at which the gains from trade have been fairly distributed. We propose to declare equitable any final allocation which is invariant under arbitrary permutations among the agents of the components of the initial allocation, followed by the operation of ψ. We also formulate a series of other criteria patterned on this model, and we investigate the existence of allocations satisfying these criteria for several natural choices of ψ.

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