We show that a social planner who seeks to allocate a given sum in order to reduce efficiently the social stress of a population, as measured by the aggregate relative deprivation of the population, pursues a disbursement procedure that is identical to the procedure adhered to by a Rawlsian...

We show that a social planner who seeks to allocate a given sum in order to reduce efficiently the social stress of a population, as measured by the aggregate relative deprivation of the population, pursues a disbursement procedure that is identical to the procedure adhered to by a Rawlsian...

We estimate the long-term effects of start-up subsidies (SUS) for the unemployed on subjective outcome indicators of well-being, as measured by the participants' satisfaction in different domains. This extends previous analyses of the current German SUS program ("Gründungszuschuss") that...

Combining a standard measure of concern about low relative wealth and a standard measure of relative risk aversion leads to a novel explanation of variation in risk-taking behavior identified and documented by social psychologists and economists. We obtain two results: (1) Holding individual i's...

Under a deadweight loss of tax and transfer, there is tension between the optimal policy choices of a Rawlsian social planner and a utilitarian social planner. However, when with a weight greater than a certain critical value the individuals' utility functions incorporate distaste for low...

Acknowledging individuals' distaste for low relative income renders trade less appealing when trade is viewed as a technology that integrates economies by merging separate social spheres into one. We define a “trembling trade” as a situation in which gains from trade are overtaken by losses...

The Gini coefficient features prominently in Amartya Sen's 1973 and 1997 seminal work on income inequality and social welfare. We construct the Gini coefficient from social-psychological building blocks, reformulating it as a ratio between a measure of social stress and aggregate income. We...