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Weakening transferable utility: the case of non-intersecting Pareto curves
Transferable utility (TU) is a widely used assumption in economics. In this paper, we weaken the TU property to a setting where distinct Pareto frontiers have empty intersections. We call this the no-intersection property (NIP). We show that the NIP is strictly weaker than TU, but still allows to derive several desirable properties. We discuss the NIP in relation to several models where TU has turned out to be a key assumption: models of assortative matching, principal-agent models with asymmetric information, the Coase Independence Property and Becker's Rotten Kid Theorem.
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Publication status
- Published
File Version
- Accepted version
Journal
Journal of Economic TheoryISSN
0022-0531Publisher
ElsevierExternal DOI
Volume
188Page range
1-37Article number
a105035Department affiliated with
- Economics Publications
Full text available
- Yes
Peer reviewed?
- Yes
Legacy Posted Date
2020-07-29First Open Access (FOA) Date
2021-10-01First Compliant Deposit (FCD) Date
2020-07-29Usage metrics
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