An Index of Unfairness
Aguiar, V. H., Pongou, R., Serrano, R., & Tondji, J. B. (2019). An Index of Unfairness. In Handbook of the Shapley Value (pp. 31-48). CRC Press Taylor and Francis.
18 Pages Posted: 2 Apr 2019 Last revised: 27 Jul 2021
Date Written: March 9, 2019
Abstract
Aguiar, Pongou, and Tondji (2018) propose the Shapley distance as a measure of the extent to which output sharing among the stakeholders of an organization can be considered unfair. It measures the distance between an arbitrary pay profile and the Shapley pay profile under a given technology, the latter profile defining the fair distribution. We provide an axiomatic characterization of the Shapley distance and show that it can be used to determine the outcome of an underlying bargaining process. We also present applications highlighting how favoritism in income distribution, egalitarianism, and taxation violate the different ideals of justice that define the Shapley value. The analysis has implications that can be tested using real-world data sets.
Keywords: Shapley value, Shapley distance, (un)fairness, horizontal equity, efficiency, marginality
JEL Classification: C71, C78, D20, D30, J30
Suggested Citation: Suggested Citation