Recent theoretical progress on inequity has left unresolved the crucial question of what constitutes equity. This paper proposes a positive theory of distributive justice, in a framework of inequity aversion, that depends on three general justice principles and context. The current study challenges the view of many previous inquiries that justice is context-specific and instead advances a theor...

This paper provides new estimates of efficient emission fees for sulfur dioxide (SO2) and nitrogen oxides (NOx) emissions in the US electricity sector. The estimates are obtained by coupling a detailed simulation model of the US electricity markets with an integrated assessment model that links changes in emissions with atmospheric transport, environmental endpoints, and valuation of impacts. E...

This paper compares the implementation of the two economic evaluation methods Cost-Effectiveness/Utility (CEA/CUA) and Cost-Benefit Analysis (CBA) as tools for allocation of national public funds in the health and transport sector in Sweden, respectively. We compare the recommended values for important economic parameters such as the social discount rate, the marginal cost of public funds, and ...

We present a laboratory experiment that measures the effects of group identity – one’s perceived membership in social groups – on market transactions in an oligopoly market with a few sellers and buyers. We artificially induce group identity using art preferences and college majors in different treatments, respectively. Subjects are randomly assigned into the roles of buyers and sellers and int...

We study the problem of allocating objects using lotteries when agents only submit preferences over objects. A standard approach is to “extend” agents’ preferences over objects to preferences over lotteries, using (first-order) stochastic dominance, or the sd-extension. Following Cho (2016), we complement this approach with two alternative extensions, the dland ulextensions, that give rise to l...

The economic costs of climate change can be large, or perhaps non-existent. We cannot tell before experiencing climate change, and thus the social cost of carbon is partly based on subjective beliefs. We take a dataset of estimates for the carbon price as a representation of beliefs, and develop a tractable stochastic climate-economy model that replicates the distribution of estimates. We use t...

Consider an auction for a divisible good where bidders have private budgets. Recent work by Dobzinski, Lavi, and Nisan (2012) shows there is no individually rational dominant strategy mechanism that implements a Pareto efficient outcome and satisfies weak budget balance when bidders have private budgets. My main result shows that when bidders have full-support beliefs over their rivals’ types, ...

We consider economies with incomplete markets, one good per state, two periods, t = 0, 1, private ownership of initial endowments, a single firm, and no assets other than shares in this firm. In Dierker, Dierker, Grodal (2002), we give an example of such an economy in which all market equilibria are constrained inefficient. In this paper, we weaken the concept of constrained efficiency by takin...

In this paper we consider the problem of double implementation of Linear Cost Share Equilibrium (LCSE) allocations by a feasible and continuous mechanism whose Nash allocations and strong Nash allocations coincide with Linear Cost Share Equilibrium allocations. The mechanism presented here allows preferences and initial endowments as well as coalition patterns to be privately observed, a featur...

We examine how different welfarist frameworks evaluate the social value of mortality risk reduction. These frameworks include classical, distributively unweighted cost-benefit analysis—i.e., the “value per statistical life” (VSL) approach—and various social welfare functions (SWFs). The SWFs are either utilitarian or prioritarian, applied to policy choice under risk in either an “ex post” or “e...