We analyze a general model of rationing in which agents have baselines, in addition to claims against the (insufficient) endowment of the good to be allocated. Many real-life problems fit this general model (e.g., bankruptcy with prioritized claims, resource allocation in the public health care...

A political-economic environment is studied in which two parties, representing different constituencies of citizens, compete over a proportional tax rate to be levied on private endowments, to finance a public good. Although parties know the distribution of citizen traits (preferences and...