Kai Spiekermann & Alex Voorhoeve (both LSE)
When discussing the use of lotteries in allocation problems, three questions can be asked:
- When are lotteries a fair (or the fairest) way to allocate goods?
- Why are lotteries fair, when they are?
- Which lotteries are fair?
The first question is the most familiar one from the literature on lotteries. Very roughly, lotteries are considered to be a fair way to allocate goods when the goods are indivisible, under-supplied, and all possible recipients have equal claims to the good. The second question asks for the justification of using lotteries for allocation. To argue that a lottery is better than, for instance, purely arbitrary decisions, it is typically assumed that the potential recipients have a claim of fairness to be treated equally. The third question has been raised much less often. Perhaps this is because the answer is assumed to be clear: the fairest lottery is the one that gives everyone an equal chance. There is some disagreement about whether the probabilities of interest are epistemic or objective, but to our best knowledge no one has argued that any property beyond the epistemic or objective probability distribution matters to assess the fairness of lotteries. We argue that this view is mistaken. To show this we present some examples and then offer a hypothesis that systematizes all the intuitions these examples trigger. Put very roughly, the best lotteries to use are those that could easily have reversed the fortunes of the winner and loser.
*Note unusual location: Seminar Room A*