Efficiency-conditional priority to the worst-off

Download

Available soon

Abstract

We study how to rank multidimensional allocations, over which agents have heterogeneous preferences, according to a new efficiency-preserving transfer principle. The motivation is that in conjunction with efficiency and informational parsimony principles, transfer requirements previously proposed, which ignore the respective efficiency of the pre-and-post-transfer allocations, force society to give absolute priority to the worst-off. The social orderings that we characterize —on the basis of our new transfer axiom, strong Pareto, continuity and an assumption pertaining to the representation of individual preferences— combine an inequality-neutral ordering and an infinitely inequality-averse ordering, and may display any finite aversion to inequality, except neutrality.