Axiomatic Resource Allocation for Heterogeneous Agents

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Working paper
Juan D. Moreno-Ternero and John E. Roemer
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We analyze a model of resource allocation in which agents' abilities (to transform the resource into an interpersonally comparable outcome) and initial endowments may differ. We impose ethical and operational axioms in this model and characterize some allocation rules as a result of combining these axioms. Two focal (and polar) egalitarian rules are singled out. On the one hand, the rule that allocates the resource equally across agents. On the other hand, the rule tha allocates the resource so that the distribution of final outcomes is lexicographically maximized.
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