IDEAS home Printed from https://ideas.repec.org/p/fbb/wpaper/201083.html

Aversion to Inequality and Segregating Equilibria

Author

Listed:
  • Cabrales Goitia Antonio

    (UNIVERSITY CARLOS III OF MADRID)

  • Calvó-Armengol Antoni

    (UNIVERSITY CARLOS III OF MADRID)

Abstract

This working paper shows that models where preferences of individuals depend not only on their allocations, but also on the well-being of other persons, can produce both large and testable effects. We study the allocation to firms of workers with heterogeneous productivities to firms. We show that even small deviations from purely selfish preferences lead to widespread workplace skill segregation. This result holds for a broad class and distribution of social preferences. That is, workers of different abilities tend to work in different firms, as long as they care somewhat more about the utilities of workers who are close.

Suggested Citation

  • Cabrales Goitia Antonio & Calvó-Armengol Antoni, 2007. "Aversion to Inequality and Segregating Equilibria," Working Papers 201083, Fundacion BBVA / BBVA Foundation.
    • Handle: RePEc:fbb:wpaper:201083
    as

    Download full text from publisher

    File URL: http://www.fbbva.es/TLFU/tlfu/ing/publicaciones/documentos/fichadoc/index.jsp?codigo=237
    Download Restriction: no
    ---><---

    Other versions of this item:

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fbb:wpaper:201083. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Fundacion BBVA / BBVA Foundation (email available below). General contact details of provider: https://edirc.repec.org/data/fbbvaes.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.