0
$\begingroup$

I was doing an exercise of utility and got confused with a min utility function. endowments can redistribute among individuals. How am i supposed to increase his utility. Can i simply reduce the endowment of this min utility person(or give him extra)?

Improve this question
$\endgroup$
1
  • 2
    $\begingroup$ Can you please be more specific regarding the utility function and what you are trying to do? $\endgroup$
    – Oliv
    Apr 7 '17 at 9:54
4
$\begingroup$

Given a utility function of the form $U(a,b)=min\{a,b\}$. Suppose that currently $a<b$. To increase utility, you should allocate more of $a$ to this person until $a=b$ and then increase $a,b$ proportionally.

Improve this answer
$\endgroup$
1
  • $\begingroup$ You should allocate more of $a$ you mean. $\endgroup$
    – Oliv
    Apr 7 '17 at 17:23

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.