The Principle of Strong Kiminishing Transfer.

In a seminal paper, Kolm [14] introduces the principle diminishing transfer. This principle requires that a transfert from an individual with income x to one with income x - D(D > 0) has a greater impact on social welfare the lower x is. On the other hand Mehran [15] and Kakwani [11] introduced another principle, namely the principle of dual diminishing transfer, which states that a transfer from an individual with rank i to one with rank (i - p) has a greater impact the lower i is. We give here necessary and sufficient conditions for a decision maker who behaves in accordance with dual Yaari's model to respect the principle of dual diminishing transfer. Unfortunately, it appears that if a decision maker who behaves in accordance with the RDEU model respects the principle of diminishing transfer, then he behaves in accordance with the EU model.