Cervellati, Matteo; Esteban, Joan; Kranich, Laurence - Barcelona Graduate School of Economics (Barcelona GSE) - 2007
. In "cohesive" equilibria, all individuals conform to the standard of proper behaviour, income inequality is low and … response to larger inequality. In a "clustered" equilibrium skilled workers work above the mean while unskilled workers work … below. In such an equilibrium, income inequality is large and sentiments are biased in favor of the industrious. As …