This paper considers tradable mobility permit schemes in a monocentric city with a distorting labor tax. Three schemes are analyzed, that differ by the (spatial) allocation of permits to households. Numerical results show that the scheme with permits allocated in proportion to labor supply reaches about 99.9% of the first-best welfare, being the only welfare-increasing scheme for higher levels of labor tax, and being more efficient than the second-best tax for levels of the labor tax of 20% or higher. This is due to the welfare gains of incentivizing labor supply, which has an effect similar to the revenue recycling effect of conventional road pricing, but that can be better optimized by the social planner by exploiting spatial differentiation. When permits are allocated on the basis of households’ residential distance from the CBD, a spatially differentiated component leads to higher welfare levels than with the third scheme considered, which is the allocation in proportion to households’ kilometers traveled.
{"title":"Tradable mobility permits in a monocentric city with pre-existing labor taxation: a general equilibrium perspective","authors":"Diego Candia, E. Verhoef","doi":"10.2139/ssrn.3914773","DOIUrl":"https://doi.org/10.2139/ssrn.3914773","url":null,"abstract":"This paper considers tradable mobility permit schemes in a monocentric city with a distorting labor tax. Three schemes are analyzed, that differ by the (spatial) allocation of permits to households. Numerical results show that the scheme with permits allocated in proportion to labor supply reaches about 99.9% of the first-best welfare, being the only welfare-increasing scheme for higher levels of labor tax, and being more efficient than the second-best tax for levels of the labor tax of 20% or higher. This is due to the welfare gains of incentivizing labor supply, which has an effect similar to the revenue recycling effect of conventional road pricing, but that can be better optimized by the social planner by exploiting spatial differentiation. When permits are allocated on the basis of households’ residential distance from the CBD, a spatially differentiated component leads to higher welfare levels than with the third scheme considered, which is the allocation in proportion to households’ kilometers traveled.","PeriodicalId":410371,"journal":{"name":"ERN: Other Microeconomics: Welfare Economics & Collective Decision-Making (Topic)","volume":"64 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-08-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134530459","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We study collective action under adverse incentives: each member of the group has a given budget ('use-it-or-lose-it') that is his private information and that can be used for contributions to make the group win a prize and for internal fights about this very prize. Even in the face of such rivalry in resource use, the group often succeeds to overcome the collective action problem in non-cooperative equilibrium. One type of equilibrium has group members who both contribute, the other type has volunteers who make full stand-alone contributions. Both types of equilibrium exist for larger and partially overlapping parameter ranges.
{"title":"Collective Action and Intra-group Conflict with Fixed Budgets","authors":"Kai A. Konrad, Florian Morath","doi":"10.2139/ssrn.3909789","DOIUrl":"https://doi.org/10.2139/ssrn.3909789","url":null,"abstract":"We study collective action under adverse incentives: each member of the group has a given budget ('use-it-or-lose-it') that is his private information and that can be used for contributions to make the group win a prize and for internal fights about this very prize. Even in the face of such rivalry in resource use, the group often succeeds to overcome the collective action problem in non-cooperative equilibrium. One type of equilibrium has group members who both contribute, the other type has volunteers who make full stand-alone contributions. Both types of equilibrium exist for larger and partially overlapping parameter ranges.","PeriodicalId":410371,"journal":{"name":"ERN: Other Microeconomics: Welfare Economics & Collective Decision-Making (Topic)","volume":"10 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-08-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128890624","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper studies the role of expected neediness for the formation of mutual support arrangements between households. I predict that under strategic link formation in the context of risk-sharing, households with fewer resources and thus a higher probability to become needy have a higher incentive to engage in informal support, yet mutual support arrangements should be less likely between households that differ in their expected neediness. The predictions are tested using census support network data of a fishing village on the Philippines. I show that households are indeed more likely to form mutual support arrangements with households that face a similar probability of neediness; yet, households with fewer resources are not necessarily more likely to engage in mutual support. Furthermore, I document substantial differences in the structure of reciprocated and unreciprocated support links that need to be accounted for in the analysis of support arrangements.
{"title":"Expected Neediness and the Formation of Mutual Support Arrangements: Evidence from the Philippines","authors":"Friederike Lenel","doi":"10.2139/ssrn.3899806","DOIUrl":"https://doi.org/10.2139/ssrn.3899806","url":null,"abstract":"This paper studies the role of expected neediness for the formation of mutual support arrangements between households. I predict that under strategic link formation in the context of risk-sharing, households with fewer resources and thus a higher probability to become needy have a higher incentive to engage in informal support, yet mutual support arrangements should be less likely between households that differ in their expected neediness. The predictions are tested using census support network data of a fishing village on the Philippines. I show that households are indeed more likely to form mutual support arrangements with households that face a similar probability of neediness; yet, households with fewer resources are not necessarily more likely to engage in mutual support. Furthermore, I document substantial differences in the structure of reciprocated and unreciprocated support links that need to be accounted for in the analysis of support arrangements.","PeriodicalId":410371,"journal":{"name":"ERN: Other Microeconomics: Welfare Economics & Collective Decision-Making (Topic)","volume":"2 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-08-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121917027","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Consumers often enjoy displaying luxury consumption to signal their private wealth status. The emergence of social media has fueled such desire for status signaling. Meanwhile, the rising of e-commerce has made it easy for consumers to search and purchase cheap non-deceptive counterfeits to send a ``fake'' status signal, posing a serious problem to the luxury (status product) industry. Motivated by these industry dynamics, we consider a market entry deterrence game between an incumbent status product firm (the firm) and a non-deceptive counterfeiter (the counterfeiter) who attempts to enter the market. A unique feature of our model is that the market demand is endogenously determined by a consumer status signaling subgame. We investigate the interaction among consumer status signaling, wealth inequality, and equilibrium market outcomes, as well as the implications of anti-counterfeit measures aimed at increasing the counterfeiter market entry cost. Our analysis yields three main insights. First, we show that without counterfeits, the firm is strictly better off from the heightened motive of consumer status signaling; however, such benefit would be neutralized by the potential counterfeiter entry. Second, we find that the presence of counterfeits lowers the firm's profit, but may induce the firm to raise its price. It may also increase social welfare, despite enabling a fake status signal. Third, we demonstrate that increasing the counterfeiter market entry cost may not completely eliminate counterfeiting insofar as the consumer status signaling motive and wealth inequality are high, in which case the firm would settle for strategic coexistence with the counterfeiter.
{"title":"Consumer Status Signaling, Wealth Inequality and Non-deceptive Counterfeits","authors":"Li Chen, Zhen Lian, S. Yao","doi":"10.2139/ssrn.3889503","DOIUrl":"https://doi.org/10.2139/ssrn.3889503","url":null,"abstract":"Consumers often enjoy displaying luxury consumption to signal their private wealth status. The emergence of social media has fueled such desire for status signaling. Meanwhile, the rising of e-commerce has made it easy for consumers to search and purchase cheap non-deceptive counterfeits to send a ``fake'' status signal, posing a serious problem to the luxury (status product) industry. Motivated by these industry dynamics, we consider a market entry deterrence game between an incumbent status product firm (the firm) and a non-deceptive counterfeiter (the counterfeiter) who attempts to enter the market. A unique feature of our model is that the market demand is endogenously determined by a consumer status signaling subgame. We investigate the interaction among consumer status signaling, wealth inequality, and equilibrium market outcomes, as well as the implications of anti-counterfeit measures aimed at increasing the counterfeiter market entry cost. Our analysis yields three main insights. First, we show that without counterfeits, the firm is strictly better off from the heightened motive of consumer status signaling; however, such benefit would be neutralized by the potential counterfeiter entry. Second, we find that the presence of counterfeits lowers the firm's profit, but may induce the firm to raise its price. It may also increase social welfare, despite enabling a fake status signal. Third, we demonstrate that increasing the counterfeiter market entry cost may not completely eliminate counterfeiting insofar as the consumer status signaling motive and wealth inequality are high, in which case the firm would settle for strategic coexistence with the counterfeiter.","PeriodicalId":410371,"journal":{"name":"ERN: Other Microeconomics: Welfare Economics & Collective Decision-Making (Topic)","volume":"7 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-07-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126508742","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Participatory wealth rankings (PWRs) present an inclusive and inexpensive targeting method to identify poor households. They tend to be well received by participants but point to a systematically different understanding of welfare than implied by consumption-based rankings. This suggests that PWRs could be used as the basis for alternative welfare measures that aim to reflect local perceptions of poverty. This paper demonstrates how such a measure can be constructed, using data from a field experiment on poverty targeting in Indonesia. It then explores the potential impact of using this welfare measure as targeting goal on participants’ and village leaders’ satisfaction. I find that higher targeting accuracy—using the PWR-based measure as benchmark—increases satisfaction with the program. However, after controlling for targeting accuracy, the PWR does not lead to discernibly higher satisfaction than a proxy means targeting mechanism. The PWRs thus seem to be appreciated for their resulting allocations rather than valued intrinsically. I also find that targeting accuracy explains satisfaction outcomes better when it is measured against PWR-based welfare rather than predicted consumption. This holds true even for communities where no actual PWRs had been conducted. The results suggest that the information contained in PWRs can be used as a meaningful basis for targeting and poverty measurement.
{"title":"Welfare Measurement and Poverty Targeting Based on Participatory Wealth Rankings","authors":"Martin Wiegand","doi":"10.2139/ssrn.3756257","DOIUrl":"https://doi.org/10.2139/ssrn.3756257","url":null,"abstract":"Participatory wealth rankings (PWRs) present an inclusive and inexpensive targeting method to identify poor households. They tend to be well received by participants but point to a systematically different understanding of welfare than implied by consumption-based rankings. This suggests that PWRs could be used as the basis for alternative welfare measures that aim to reflect local perceptions of poverty. This paper demonstrates how such a measure can be constructed, using data from a field experiment on poverty targeting in Indonesia. It then explores the potential impact of using this welfare measure as targeting goal on participants’ and village leaders’ satisfaction. I find that higher targeting accuracy—using the PWR-based measure as benchmark—increases satisfaction with the program. However, after controlling for targeting accuracy, the PWR does not lead to discernibly higher satisfaction than a proxy means targeting mechanism. The PWRs thus seem to be appreciated for their resulting allocations rather than valued intrinsically. I also find that targeting accuracy explains satisfaction outcomes better when it is measured against PWR-based welfare rather than predicted consumption. This holds true even for communities where no actual PWRs had been conducted. The results suggest that the information contained in PWRs can be used as a meaningful basis for targeting and poverty measurement.<br>","PeriodicalId":410371,"journal":{"name":"ERN: Other Microeconomics: Welfare Economics & Collective Decision-Making (Topic)","volume":"47 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-12-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115935231","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Similar to fellow Nobelists Vernon Smith and Richard Thaler, Elinor Ostrom has emphasized not just our cognitive limits, but also the institutions that people create to overcome them. But, while Vernon Smith or Thaler still focus primarily on private choices, and the institutions within which such choices happen, e.g. private financial or health choices, Elinor Ostrom has expanded the realm of inquiry by exploring how bounded rationality also enters the picture in collective action problems. The fact that Elinor Ostrom is primarily interested in collective action, rather than private individual action, has also led her to a different perspective on the limits of rational choice models. For Ostrom, the simplistic rational choice collective action model, as developed in Mancur Olson’s Logic of Collective Action, leads to wrong predictions about the conditions under which collective action happens (or doesn’t happen), and, furthermore, biases the analysis in favor of paternalistic solutions for solving collective action problem, as illustrated in Hardin’s analysis of the tragedy of the commons. The result of Ostrom’s analysis is a richer concept of rational choice, which simultaneously (a) accepts that individuals will act opportunistically, possibly undermining collective action, and (b) acknowledges the capacities of groups to take advantage of richer behavioral features, like altruistic punishment, fairness, group loyalty, and intrinsic preferences, in order to enable self-governing collective action. This richer concept of human behavior also raises additional concerns about the problems of hierarchical paternalistic proposals, showing that tyranny and oppression can be even more robust than accounted for by the simple rational choice model, particularly when we consider group loyalty.
与同为诺贝尔奖得主的弗农·史密斯(Vernon Smith)和理查德·塞勒(Richard Thaler)类似，埃莉诺·奥斯特罗姆(Elinor Ostrom)不仅强调了我们的认知极限，还强调了人们为克服这些极限而建立的制度。但是，虽然弗农·史密斯和塞勒仍然主要关注私人选择，以及这些选择发生的机构，例如私人金融或健康选择，但埃莉诺·奥斯特罗姆通过探索有限理性如何在集体行动问题中发挥作用，扩大了研究领域。埃莉诺·奥斯特罗姆(Elinor Ostrom)主要对集体行动感兴趣，而不是个人的私人行动，这一事实也使她对理性选择模型的局限性有了不同的看法。在奥斯特罗姆看来，曼瑟尔·奥尔森(Mancur Olson)的《集体行动逻辑》(Logic of collective action)中提出的过分简单化的理性选择集体行动模型，对集体行动发生(或不发生)的条件做出了错误的预测，而且，正如哈丁(Hardin)对公地悲剧的分析所表明的那样，这种分析倾向于采用家长式的解决方案来解决集体行动问题。奥斯特罗姆分析的结果是一个更丰富的理性选择概念，它同时(a)承认个人会机会主义地行动，可能会破坏集体行动，(b)承认群体有能力利用更丰富的行为特征，如利他惩罚、公平、群体忠诚和内在偏好，以实现自治的集体行动。这种更丰富的人类行为概念也引发了对等级家长式建议问题的额外关注，表明暴政和压迫可能比简单的理性选择模型更强大，特别是当我们考虑到群体忠诚时。
{"title":"Elinor Ostrom as Behavioral Economist","authors":"Vlad Tarko","doi":"10.2139/ssrn.3739912","DOIUrl":"https://doi.org/10.2139/ssrn.3739912","url":null,"abstract":"Similar to fellow Nobelists Vernon Smith and Richard Thaler, Elinor Ostrom has emphasized not just our cognitive limits, but also the institutions that people create to overcome them. But, while Vernon Smith or Thaler still focus primarily on private choices, and the institutions within which such choices happen, e.g. private financial or health choices, Elinor Ostrom has expanded the realm of inquiry by exploring how bounded rationality also enters the picture in collective action problems. The fact that Elinor Ostrom is primarily interested in collective action, rather than private individual action, has also led her to a different perspective on the limits of rational choice models. For Ostrom, the simplistic rational choice collective action model, as developed in Mancur Olson’s Logic of Collective Action, leads to wrong predictions about the conditions under which collective action happens (or doesn’t happen), and, furthermore, biases the analysis in favor of paternalistic solutions for solving collective action problem, as illustrated in Hardin’s analysis of the tragedy of the commons. The result of Ostrom’s analysis is a richer concept of rational choice, which simultaneously (a) accepts that individuals will act opportunistically, possibly undermining collective action, and (b) acknowledges the capacities of groups to take advantage of richer behavioral features, like altruistic punishment, fairness, group loyalty, and intrinsic preferences, in order to enable self-governing collective action. This richer concept of human behavior also raises additional concerns about the problems of hierarchical paternalistic proposals, showing that tyranny and oppression can be even more robust than accounted for by the simple rational choice model, particularly when we consider group loyalty.","PeriodicalId":410371,"journal":{"name":"ERN: Other Microeconomics: Welfare Economics & Collective Decision-Making (Topic)","volume":"181 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124550861","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The purpose of this paper is to investigate the strong consistency of neutral and monotonic binary social decision rules. Individuals are assumed to satisfy von Neumann-Morgenstern axioms of individual rationality. The main result of the paper shows that there does not exist any neutral and monotonic non-null non-dictatorial binary social decision rule which is strongly consistent. The relationship between restricted preferences and the existence of strong equilibria is also investigated. It is shown that for every non-dictatorial social decision function satisfying the conditions of independence of irrelevant alternatives, neutrality, monotonicity and weak Pareto-criterion there exists a profile of individual orderings satisfying value-restriction corresponding to which there is no strong equilibrium.
{"title":"The Strong Consistency of Neutral and Monotonic Binary Social Decision Rules","authors":"S. Jain","doi":"10.2139/ssrn.3718621","DOIUrl":"https://doi.org/10.2139/ssrn.3718621","url":null,"abstract":"The purpose of this paper is to investigate the strong consistency of neutral and monotonic binary social decision rules. Individuals are assumed to satisfy von Neumann-Morgenstern axioms of individual rationality. The main result of the paper shows that there does not exist any neutral and monotonic non-null non-dictatorial binary social decision rule which is strongly consistent. The relationship between restricted preferences and the existence of strong equilibria is also investigated. It is shown that for every non-dictatorial social decision function satisfying the conditions of independence of irrelevant alternatives, neutrality, monotonicity and weak Pareto-criterion there exists a profile of individual orderings satisfying value-restriction corresponding to which there is no strong equilibrium.","PeriodicalId":410371,"journal":{"name":"ERN: Other Microeconomics: Welfare Economics & Collective Decision-Making (Topic)","volume":"8 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-10-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124580903","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We introduce a family of values for TU-games that offers a compromise between the proportional and equal division values. Each value, called an alpha-mollified value, is obtained in two steps. First, a linear function with respect to the worths of all coalitions is defined which associates a real number to every TU-game. Second, the weight assigned by this function is used to weigh proportionality and equality principles in allocating the worth of the grand coalition. We provide an axiomatic characterization of this family, and show that this family contains the affine combinations of the equal division value and the equal surplus division value as the only linear values. Further, we identify the proportional division value and the affine combinations of the equal division value and the equal surplus division value as those members of this family, that satisfy projection consistency. Besides, we provide a procedural implementation of each single value in this family.
{"title":"Compromising between the Proportional and Equal Division Values: Axiomatization, Consistency and Implementation","authors":"Zhengxing Zou, R. van den Brink, Yukihiko Funaki","doi":"10.2139/ssrn.3684658","DOIUrl":"https://doi.org/10.2139/ssrn.3684658","url":null,"abstract":"We introduce a family of values for TU-games that offers a compromise between the proportional and equal division values. Each value, called an alpha-mollified value, is obtained in two steps. First, a linear function with respect to the worths of all coalitions is defined which associates a real number to every TU-game. Second, the weight assigned by this function is used to weigh proportionality and equality principles in allocating the worth of the grand coalition. We provide an axiomatic characterization of this family, and show that this family contains the affine combinations of the equal division value and the equal surplus division value as the only linear values. Further, we identify the proportional division value and the affine combinations of the equal division value and the equal surplus division value as those members of this family, that satisfy projection consistency. Besides, we provide a procedural implementation of each single value in this family.","PeriodicalId":410371,"journal":{"name":"ERN: Other Microeconomics: Welfare Economics & Collective Decision-Making (Topic)","volume":"90 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-08-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125697484","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We introduce a framework to examine, both theoretically and empirically, electoral maldistricting. Maldistricting is defined as districting in pursuit of a policy at the expense of social welfare. Analysis is performed on the set of implementable (via some district map) legislatures, which are characterized geometrically (via majorization) and in information theoretic terms. The index of maldistricting that we propose aligns with courts' purported motivations for requesting redistricting in the three states that form our case study. The maldistricting we document favors Republicans over Democrats.
{"title":"Electoral Maldistricting","authors":"Andrei Gomberg, Romans Pancs, Tridib Sharma","doi":"10.2139/ssrn.3579221","DOIUrl":"https://doi.org/10.2139/ssrn.3579221","url":null,"abstract":"We introduce a framework to examine, both theoretically and empirically, electoral maldistricting. Maldistricting is defined as districting in pursuit of a policy at the expense of social welfare. Analysis is performed on the set of implementable (via some district map) legislatures, which are characterized geometrically (via majorization) and in information theoretic terms. The index of maldistricting that we propose aligns with courts' purported motivations for requesting redistricting in the three states that form our case study. The maldistricting we document favors Republicans over Democrats.","PeriodicalId":410371,"journal":{"name":"ERN: Other Microeconomics: Welfare Economics & Collective Decision-Making (Topic)","volume":"64 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-04-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114406474","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article studies coalition formation among individuals who differ in productivity. We consider egalitarian societies in which coalitions split their surplus equally and individualistic societies in which coalitions split their surplus according to productivity. Preferences of coalition members depend on their material pay-offs, but are also influenced by relative pay-off concerns. The stable partitions in both egalitarian and individualistic societies are segregated, i.e., individuals with adjacent productivities form coalitions. If some individuals are not part of a productive coalition, then these are the least productive ones for egalitarian societies and the most productive ones for individualistic societies.
{"title":"The Last Will Be First, and the First Last: Segregation in Societies With Relative Payoff Concerns","authors":"P. Herings, Riccardo D. Saulle, C. Seel","doi":"10.2139/ssrn.3564235","DOIUrl":"https://doi.org/10.2139/ssrn.3564235","url":null,"abstract":"This article studies coalition formation among individuals who differ in productivity. We consider egalitarian societies in which coalitions split their surplus equally and individualistic societies in which coalitions split their surplus according to productivity. Preferences of coalition members depend on their material pay-offs, but are also influenced by relative pay-off concerns. The stable partitions in both egalitarian and individualistic societies are segregated, i.e., individuals with adjacent productivities form coalitions. If some individuals are not part of a productive coalition, then these are the least productive ones for egalitarian societies and the most productive ones for individualistic societies.","PeriodicalId":410371,"journal":{"name":"ERN: Other Microeconomics: Welfare Economics & Collective Decision-Making (Topic)","volume":"9 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-03-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128365444","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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