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- Title
Optimal assignment of durable objects to successive agents.
- Authors
Bloch, Francis; Houy, Nicolas
- Abstract
This paper analyzes the assignment of durable objects to successive generations of agents who live for two periods. The optimal assignment rule is stationary, favors old agents and is determined by a selectivity function, which satisfies an iterative functional differential equation. More patient social planners are more selective, as are social planners facing distributions of types with higher probabilities for higher types. The paper also characterizes optimal assignment rules when monetary transfers are allowed and agents face a recovery cost, when multiple agents enter society, and when agents can invest to improve their types.
- Subjects
NUMERICAL solutions to functional differential equations; SOCIAL planning; DISTRIBUTION (Economic theory); PROBABILITY theory; MONETARY policy; REVENUE management; OVERLAPPING generations model (Economics)
- Publication
Economic Theory, 2012, Vol 51, Issue 1, p13
- ISSN
0938-2259
- Publication type
Article
- DOI
10.1007/s00199-011-0616-8