Stark, Oded; Falniowski, Fryderyk; Jakubek, Marcin - 2016
In determining the optimal redistribution of a given population's income, we ask which factor is more important: the … the individuals' concern at having a low relative income, indexed by a parameter beta in a utility function that is a … convex combination of (absolute) income and low relative income. Assuming that the redistribution comes at a cost (because …