A binary choice problem with side-payments and quasi-linear utilities is considered. We study two compensation rules, called social choice functions. The egalitarian rule divides equally the surplus above the average utility level. The laissez-faire rule chooses an efficient decision but performs no transfer. Egalitarianism is characterized by a monotonicity axiom called Agreement: no two agents ever disagree in comparing two distinct preferences of a third one. Laissez-fairism is characterized by the No Subsidy axiom: a coalition would not be worse off if the other agents were not present.

In an economy with one public and one private good, egalitarian-equivalent cost sharing consists of finding the highest public good level, x*, such that consuming x* for free yields a feasible utility distribution. The corresponding feasible allocation (typically unique), called egalitarian-equivalent, is in the core of the economy. Conversely, any cost sharing method satisfying Pareto optimality, cost monotonicity (nobody suffers a utility loss if the production technology improves upon, ceteris paribus), and individual rationality (no single-agent coalition objects) or no private transfers (no agent receives a positive amount of private good), must select an egalitarian-equivalent allocation in every economy.