Characterizations of the public and private ownership solutions

This paper characterizes two public ownership solutions in convex production economies with multiple inputs and multiple outputs, known respectively as the proportional and the equal benefit solutions (Roemer and Silvestre [16]), by means of axioms of upper and unanimously lower bounds of welfare respectively and an axiom of informational efficiency, Supporting Price Independence. A weaker version of the upper bound axiom defined by Moulin [9,10], Upper Bound by Stand Alone Income, is introduced in order to characterize the proportional solution in multi-input and multi-output economies. Moreover, the Walrasian solution in private ownership production economies is also completely characterized by adopting Supporting Price Independence without 'interiority' of the allocations recommended by solutions and 'differentiability' of admissible utility functions. (C) 1998 Elsevier Science B.V.