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Fair resource allocation: using welfare-based dominance constraints

journal contribution
posted on 10.05.2021, 10:31 by Nikolaos Argyris, Özlem Karsu, Mirel Yavuz
In this paper we consider the problem of supporting resource allocation decisions affecting multiple beneficiaries. Such problems inherently involve efficiency-fairness trade-offs. We introduce a new approach based on the paradigm of maximizing efficiency subject to constraints to ensure that the decision is acceptably fair. In contrast to existing literature, we incorporate fairness in the form of welfare dominance, ensuring that the resultant distribution of benefits to beneficiaries is at least as good as some reference distribution with respect to a set of social welfare functions that satisfy commonly accepted efficiency and fairness related axioms. We introduce a practical means to parameterize the problem, which allows for excluding welfare functions that are deemed insufficiently or overly sensitive to inequality. This allows for analyzing the impact of changes in inequality aversion on efficiency, thus revealing the trade-off between efficiency and fairness. We develop tractable reformulations for the resulting non-linear multi-level optimization problems. We then extend this approach for cases where resources are allocated to groups of individuals with different sizes. We demonstrate the potential use of the suggested framework on two case studies: a workload allocation problem and a healthcare provisioning problem.

Funding

Newton Fund, administered by the British Council, in the form of an overseas Travel Grant (no. RLTG6-261490920)

History

School

  • Business and Economics

Department

  • Business

Published in

European Journal of Operational Research

Publisher

Elsevier

Version

AM (Accepted Manuscript)

Rights holder

© Elsevier

Publisher statement

This paper was accepted for publication in the journal European Journal of Operational Research and the definitive published version is available at https://doi.org/10.1016/j.ejor.2021.05.003.

Acceptance date

05/05/2021

Publication date

2021-05-23

Copyright date

2021

ISSN

0377-2217

Language

en

Depositor

Dr Nikos Argyris. Deposit date: 7 May 2021

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