Weakening transferable utility: the case of non-intersecting Pareto curves

Demuynck, Thomas and Potoms, Tom (2020) Weakening transferable utility: the case of non-intersecting Pareto curves. Journal of Economic Theory, 188. a105035 1-37. ISSN 0022-0531

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Abstract

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.

Item Type: Article
Schools and Departments: University of Sussex Business School > Economics
SWORD Depositor: Mx Elements Account
Depositing User: Mx Elements Account
Date Deposited: 29 Jul 2020 07:07
Last Modified: 21 Jan 2021 12:37
URI: http://sro.sussex.ac.uk/id/eprint/92828

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