An Inequality Measure for Stochastic Allocations
Soo Hong Chew
National University of Singapore; National University of Singapore; HKUST
Jacob S. Sagi
University of North Carolina Kenan-Flagler Business School
May 13, 2011
Few papers in the literature on inequality measurement deal with uncertainty, particularly when the ranking of cohorts may not be fixed. We present a set of axioms implying such a class of inequality measures under uncertainty that is a one-parameter extension of the generalized Gini mean over the distribution of average allocations. The extension consists of a quadratic term accounting for inter-personal correlations. In particular, our measure can simultaneously accommodate a preference for "shared destiny", a preference for probabilistic mixtures over unfair allocations, and a preference for fairness "for sure" over fairness in expectation.
Number of Pages in PDF File: 37working papers series
Date posted: May 13, 2011
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