We consider a tax-funded policy of admitting and integrating asylum seekers in a country in which the incomes of the native inhabitants are differentiated; for the sake of simplicity, we assume that there are just two groups of native inhabitants: high-income natives and low-income natives. As a...

We consider a tax-funded policy of admitting and integrating asylum seekers in a country in which the incomes of the native inhabitants are differentiated; for the sake of simplicity, we assume that there are just two groups of native inhabitants: high-income natives and low-income natives. As a...

Let there be two individuals: "rich," and "poor." Due to inefficiency of the income redistribution policy, if a social planner were to tax the rich in order to transfer to the poor, only a fraction of the taxed income would be given to the poor. Under such inefficiency and a standard utility...

A utilitarian social planner who maximizes social welfare assigns the available income to those who are most efficient in converting income into utility. However, when individuals are concerned about their income falling behind the incomes of others, the optimal income distribution under...

When individuals' utility is a convex combination of their income and their concern at having a low relative income (the weights attached to income and to the concern at having a low relative income sum up to one), the maximization of aggregate utility yields an equal income distribution. This...

When individuals’ utility is a convex combination of their income and their concern at having a low relative income (the weights attached to income and to the concern at having a low relative income sum up to one), the maximization of aggregate utility yields an equal income distribution. This...

We model group formation as a response to relative deprivation. We employ two measures of relative deprivation. We show that in the case of each of these measures the process of deprivation-induced self-selection into groups reaches a steady state, and that the steady-state distribution differs...