Year: 2011
Type: preprint
Abstract: An information-theoretic thought experiment is developed to provide a methodology\nfor predicting endowment distributions in the absence of information on agent\npreferences. The allocation problem is first presented as a stylised knapsack problem.\nAlthough this knapsack allocation is intractable, the social planner can nevertheless\nmake precise predictions concerning the endowment distribution by using\nits information-theoretic structure. By construction these predictions do not rest\non the rationality of agents. It is also shown, however, that the knapsack problem\nis equivalent to a congestion game under weak assumptions, which means that the\nplanner can nevertheless evaluate the optimality of the unobserved allocation.
Author: Barde, Sylvain
Institution: University of Kent
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2109051505