Are incentives against economic justice?

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Abstract

We consider the problem of fairly allocating a social endowment of indivisible goods and money when the domain of admissible preferences contains, but is not restricted to, quasi-linear preferences. We analyze the manipulability of the Generalized Money Rawlsian Fair (GMRF) solutions. (i) We show that the Nash and strong Nash equilibrium correspondences of the “preference revelation game form” associated with each GMRF solution coincide with the no-envy solution (in equilibrium, efficiency is preserved according to agents' true preferences). (ii) A corollary is that the GMRF solutions “naturally implement” the no-envy solution in Nash and strong Nash equilibria.

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    I am grateful to William Thomson for his generous advice and his detailed comments on previous drafts of this paper. I would like to thank the editor Christian Hellwig, three anonymous referees, Paulo Barelli, John Duggan, Gabor Virag, seminar participants at Rochester, Texas A&M, the 20th International Conference on Game Theory at Stony Brook, and the 10th Meeting of the Society for Social Choice and Welfare for useful comments. This paper is based on the third chapter of my Ph.D. dissertation at the University of Rochester. All errors are my own.

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