Child labor is often condemned as a form of exploitation. I explore how the notion of exploitation, as used in everyday language, can be made precise in economic models of child labor. Exploitation is defined relative to a specific social welfare function. I first show that under the standard...

Child labor is often condemned as a form of exploitation. I explore how the notion of exploitation, as used in everyday language, can be made precise in economic models of child labor. Exploitation is defined relative to a specific social welfare function. I first show that under the standard...

We consider a model of prejudice-driven discrimination, where the advantaged 'tall' discriminate against the disadvantaged 'short'. We employ an egalitarian social welfare function to compare anti-discrimination legal rules with a non-discriminatory ('height-blind') income tax.

In this note we compare the laissez-faire steady-state solution in the Howitt and Aghion (1998) model to the social optimum. The analysis offers several new insights in comparison to the welfare analysis in Aghion and Howitt (1992). We find various new distortions between private and optimal...

Restrictions on work hours are more important in countries with a large welfare state. We show that this empirical observation is consistent with the strategic effects of such restrictions in a welfare state in the context of optimal direct taxation in the tradition of Mirrlees (1971). Our...

Economists traditionally tackle normative problems by computing optimal policy, i.e. the one that maximizes a social welfare function. In practice, however, a succession of marginal changes to a limited number of policy instruments are implemented, until no further improvement is feasible. I...

This paper discusses recent neuroeconomic evidence related to other-regarding behaviors and the decision to trust in other people's other-regarding behavior. This evidence supports the view that people derive nonpecuniary utility (i) from mutual cooperation in social dilemma (SD) games and (ii)...

An explanation for motivation crowding-out phenomena is developed in a social preferences framework. Besides selfish and fair or altruistic types a third type of agents is introduced: These 'conformists' have social preferences if they believe that sufficiently many of the others do too. When...

We set out a general framework for cooperative household models, based on Samuelson's idea of a household welfare function, but extending it to incorporate the key insight from Nash bargaining models - the idea that the household's preference ordering over the utility profiles of its members...

We study the intrapersonal relationship between trust and reciprocity in a laboratory experiment. Reciprocal subjects trust significantly more than selfish ones. This finding raises questions about theories of social preferences which predict that fairer players should trust less.