Abstract:
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In this paper we consider a sequential allocation problem with n individuals. The first individual can consume any amount of some endowment
leaving the remaining for the second individual, and so on. Motivated by the
limitations associated with the cooperative or non-cooperative solutions we
propose a new approach. We establish some axioms that should be satisfied,
representativeness, impartiality, etc. The result is a unique asymptotic allocation rule. It is shown for n = 2; 3; 4; and a claim is made for general n. We
show that it satisfies a set of desirable properties.
Key words: Sequential allocation rule, River sharing problem, Cooperative
and non-cooperative games, Dictator and ultimatum games.
JEL classification: C79, D63, D74. |