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Inequality and Inefficiency in Joint Projects

Author

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  • Debraj Ray

    (SUNY - State University of New York - State University of New York, IAE - Instituto de Analisis Economico - Consejo Superior de Investigaciones Científicas - CSIC (SPAIN))

  • Jean-Marie Baland

    (CRED - Centre de Recherche en Economie du Developpement - Facultés Universitaires Notre Dame de la Paix (FUNDP) - Namur)

  • Olivier Dagnelie

    () (CRED - Centre de Recherche en Economie du Developpement - Facultés Universitaires Notre Dame de la Paix (FUNDP) - Namur)

Abstract

A group of agents voluntarily participates in a joint project, in which efforts are not perfectly substitutable. The output is divided according to some given vector of shares. A share vector is unimprovable if no other share vector yields a higher sum of payoffs. When the elasticity of substitution across efforts is two or lower, only the perfectly equal share vector is unimprovable, and all other vectors can be improved via Lorenz domination. For higher elasticities of substitution, perfect equality is no longer unimprovable. Our results throw light on the connections between inequality and collective action.

Suggested Citation

  • Debraj Ray & Jean-Marie Baland & Olivier Dagnelie, 2007. "Inequality and Inefficiency in Joint Projects," Post-Print halshs-00160753, HAL.
  • Handle: RePEc:hal:journl:halshs-00160753
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00160753
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    References listed on IDEAS

    as
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    Cited by:

    1. Gregor, Martin, 2015. "Task divisions in teams with complementary tasks," Journal of Economic Behavior & Organization, Elsevier, vol. 117(C), pages 102-120.
    2. Martin Gregor & Lenka Stastna, 2012. "The decentralization tradeoff for complementary spillovers," Review of Economic Design, Springer;Society for Economic Design, vol. 16(1), pages 41-69, March.
    3. repec:bpj:pepspp:v:18:y:2012:i:3:p:11:n:14 is not listed on IDEAS
    4. Alberto Alesina & Eliana La Ferrara, 2003. "Ethnic Diversity and Economic Performance," Harvard Institute of Economic Research Working Papers 2028, Harvard - Institute of Economic Research.
    5. Olivier Dagnelie, 2008. "Inequality and a Repeated Joint Project," Working Papers 344, Barcelona Graduate School of Economics.
    6. Cubel Maria & Sanchez-Pages Santiago, 2012. "The effect of within-group inequality in a conflict against a unitary threat," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 18(3), pages 1-11, December.
    7. Guillaume Cheikbossian, 2016. "The political economy of (De)centralization with complementary public goods," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 47(2), pages 315-348, August.
    8. Batabyal, Amitrajeet A. & Nijkamp, Peter, 2016. "Creative capital in production, inefficiency, and inequality: A theoretical analysis," International Review of Economics & Finance, Elsevier, vol. 45(C), pages 553-558.
    9. L. Bagnoli & G. Negroni, 2008. "The emergence of norms of cooperation in stag hunt games with production," Working Papers 626, Dipartimento Scienze Economiche, Universita' di Bologna.
    10. Münster, Johannes, 2008. "Group contest success functions
      [Group Contest Success Functions]
      ," Discussion Papers, Research Unit: Market Processes and Governance SP II 2008-20, Social Science Research Center Berlin (WZB).
    11. repec:eee:thpobi:v:113:y:2017:i:c:p:1-12 is not listed on IDEAS
    12. Kolmar, Martin & Rommeswinkel, Hendrik, 2013. "Contests with group-specific public goods and complementarities in efforts," Journal of Economic Behavior & Organization, Elsevier, vol. 89(C), pages 9-22.
    13. Martin Gregor, 2011. "Tradeoffs of foreign assistance for the weakest-link global public goods," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 18(2), pages 233-251, April.
    14. Uler, Neslihan, 2009. "Public goods provision and redistributive taxation," Journal of Public Economics, Elsevier, vol. 93(3-4), pages 440-453, April.
    15. Barbieri, Stefano, 2017. "Voluntary public good provision with private information using order statistics," Economics Letters, Elsevier, vol. 150(C), pages 63-66.
    16. Johannes Münster, 2009. "Group contest success functions," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 41(2), pages 345-357, November.
    17. Marchiori, Carmen, 2014. "Inequality and rules in the governance of water resources," Ecological Economics, Elsevier, vol. 105(C), pages 124-129.

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    Keywords

    Inequality; Collective Action; Substitutability;

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