Corporate success stories often resemble a snowball. We show how initial luck in hiring talented people, the resulting technological advantage, superior corporate culture, and status-seeking by workers and by consumers can make small initial differences generate large differences over time.

We consider taxation by a Leviathan government and by a utilitarian government in the presence of heterogenous locations within a country, when migration from one country to another is and is not possible. In a closed economy, a utilitarian government may transfer income from the poor to the...

It may be in the interest of low-ability individuals to subsidize the education of high-ability individuals. Sufficient conditions are surprisingly mild: positive externalities in education and complementarity in production between human capital and labor supplied by the low-ability individuals....