Hierarchical constrained egalitarianism in TU-games

Abstract The constrained egalitarian solution of Dutta and Ray [Econometrica 57 (1989) 615] for TU-games is extended to asymmetric cases, using the notion of hierarchical systems . This hierarchical constrained egalitarian solution for TU-games is based on the hierarchical Lorenz-ordering as an inequality measure, that extends the weighted Lorenz-ordering of Ebert [Social Choice of Welfare 16 (1999) 233]. It is shown that the hierarchical constrained egalitarian solution consists of one allocation at most. An algorithm is proposed for calculating the hierarchical constrained egalitarian solution for certain classes of games, and in particular the class of convex games. By varying the hierarchical system, each core element of a positive valued convex game is shown to be a hierarchical constrained egalitarian solution.