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Redistribution by Means of Lotteries

Author

Listed:
  • Stéphane Gauthier

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Guy Laroque

    (Sciences Po - Sciences Po, UCL - University College of London [London], IFS - Laboratory of the Institute for Fiscal Studies - Institute for Fiscal Studies)

Abstract

A government designs transfers to agents in the absence of information on their preferences. The second-best allocation is equal sharing among citizens when the awards are deterministic. We provide a necessary and sufficient condition under which lotteries improve upon the egalitarian outcome. The condition requires that the citizens with large social weights have low risk aversion, and that the left tail of the distribution of risk aversion be sufficiently dispersed.

Suggested Citation

  • Stéphane Gauthier & Guy Laroque, 2015. "Redistribution by Means of Lotteries," PSE - Labex "OSE-Ouvrir la Science Economique" hal-01158155, HAL.
    • Handle: RePEc:hal:pseose:hal-01158155
    Note: View the original document on HAL open archive server: https://hal.science/hal-01158155
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    References listed on IDEAS

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    More about this item

    Keywords

    Lerner egalitarianism; random redistribution; incentives; qualified constraints;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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