REALLOCATION OF AN INFINITELY DIVISIBLE GOOD

We consider the problem of reallocating the total initial endowments o f an infinitely divisible commodity among agents with single-peaked pr eferences. With the uniform reallocation rule we propose a solution wh ich satisfies many appealing properties, describing the effect of popu lation and endowment variations on the outcome. The central properties which are studied in this context are population monotonicity, bilate ral consistency, (endowment) monotonicity and (endowment) strategy-pro ofness. Furthermore, the uniform reallocation rule is Pareto optimal a nd satisfies several equity conditions, e.g., equal-treatment and envy -freeness. We study the trade-off between properties concerning variat ion and properties concerning equity. Furthermore, we provide several characterizations of the uniform reallocation rule based on these prop erties.