This paper describes how wealth inequality may distort public resource allocation. A government seeks to allocate limited resources to productive sectors, but sectoral productivity is privately known by agents with vested interests in those sectors. They lobby the government for preferential...

We set up a signaling game where individuals differ in ability and wealth. Higher ability means larger benefit supported by the government. Costly signals are used to transmit information regarding own deservingness. However, capital market imperfections may perturb the signals by limiting the...

The purpose of this paper is two-fold. First, we develop the measurement theory of polarization for the case in which income distributions can be described using density functions. Second, we provide sample estimators of population polarization indices that can be used to compare polarization...

We present a model of conflict in which discriminatory government policy or social intolerance is responsive to various forms of ethnic activism, including violence. It is this perceived responsiveness captured by the probability that the government gives in and accepts a proposed change in...

In this paper we study a behavioral model of conflict that provides a basis for choosing certain indices of dispersion as indicators for conflict. We show that the (equilibrium) level of conflict can be expressed as an (approximate) linear function of the Gini coefficient, the...

This paper provides a systematic classification of the different measures of polarization based on their properties. Together with the axioms proposed in Duclos, Esteban and Ray (2004) and in Wang and Tsui (2000) we consider three additional properties. We examine which properties are common to...