Equity and efficiency in an overlapping generation model
Tanguy Isaac and Paolo G. Piacquadio
Social Choice and Welfare March 2015, Volume 44, Issue 3, pp 549-565
The paper addresses intergenerational and intragenerational equity in an overlapping generation economy. We aim at defining an egalitarian distribution of a constant stream of resources, relying on ordinal non-comparable information on individual preferences. We establish the impossibility of efficiently distributing resources while treating equally agents with same preferences that belong to possibly different generations. We thus propose an egalitarian criterion based on the equal-split guarantee: this requires all agents to find their assigned consumption bundle at least as desirable as the equal division of resources.