THE SOLIDARITY AXIOM IN PARAMETRIC SURPLUS-SHARING PROBLEMS

A parametric surplus-sharing problem is given by a set X of feasible utility vectors and a disagreement utility vector d, both depending upon an exogenous parameter. We examine the existence of a surplus-sharing solution such that the outcomes selected in any two problems are Pareto comparable. We characterize existence and show how to apply this result to several micro-economic problems. These problems include distribution of private goods, production economies where the production process is jointly owned and collusion in an oligopoly.