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Implementing Efficient Egalitarian Equivalent Allocations
Vol. 52, No. 5 (Sep., 1984), pp. 1167-1177
Published by: The Econometric Society
Stable URL: http://www.jstor.org/stable/1910993
Page Count: 11
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This paper proposes a procedure for implementing efficient egalitarian equivalent allocations in an exchange economy, using the perfect equilibrium concept. This procedure is an extension of the "divide and choose" method in two ways: it is defined for more than two agents and the divider's advantage is removed by auctioning the role of divider among the agents (as in Crawford ).Thus, in contrast with other equilibrium concepts (Nash, dominant), the perfect one solves the efficiency-justice dilemma.
Econometrica © 1984 The Econometric Society