A Convergent Reallocation Policy in a Complex Set

Caravani, P. (1980). A Convergent Reallocation Policy in a Complex Set. IIASA Working Paper. IIASA, Laxenburg, Austria: WP-80-020

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Abstract

In a number of economic situations a decision maker is confronted with the problem of modifying a given and unsatisfactory resource allocation in order to improve it. This requires a control strategy to be implemented sequentially over time. Typical constraints are, loosely speaking, the control effort he is willing (or able) to exert, the information requirements on the system "state", the feasibility of intermediate allocations, and the total time in which the process is to be completed. This paper deals with some of these aspects: an "equal reallocation policy" is introduced and appropriate convergence properties are derived. On the basis of income distribution data for the Italian Economy, an example of wealth reallocation over income classes is presented.

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