Redistributive Taxation With Endogenous Sentiments
. We present a model in which an individual's sentiments toward others are determined endogenously on the basis of how they perform relative to the societal average. This, in turn, affects the individual's own behavior and hence other agents' sentiments toward her. We focus on stationary patterns of utility interdependence. To demonstrate the effects of such endogeneity, we consider an example of a production economy with redistributive taxation. There are two types of stationary equilibria: one in which all agents conform to the societal norm, and a second involving social stratification on the basis of productivity into two or three groups. The main conclusion is that the tax structure, in that it affects behavior which in turn affects sentiments, plays a crucial role in determining which type of equilibrium occurs and its characteristics as well as the extent of altruism and social cohesion in society.
|Date of creation:|
|Date of revision:|
|Contact details of provider:|| Postal: Avda. Cardenal Herrera Oria, 378, 28035 Madrid|
Web page: http://www.ief.es
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bénabou, Roland & Ok, Efe A, 1998.
"Social Mobility and the Demand for Redistribution: the POUM Hypothesis,"
CEPR Discussion Papers
1955, C.E.P.R. Discussion Papers.
- Roland Benabou & Efe A. Ok, 2001. "Social Mobility and the Demand for Redistribution: The Poum Hypothesis," The Quarterly Journal of Economics, Oxford University Press, vol. 116(2), pages 447-487.
- Roland Benabou & Efe A. Ok, 1998. "Social Mobility and the Demand for Redistribution: The POUM Hypothesis," NBER Working Papers 6795, National Bureau of Economic Research, Inc.
- Bénabou, Roland & Ok, Efe, 1997. "Social Mobility and the Demand for Redistribution : the POUM Hypothesis," IDEI Working Papers 78, Institut d'Économie Industrielle (IDEI), Toulouse, revised 1999.
- Benabou, R. & Ok, E.A., 1998. "Social Mobility and the Demand for Redistribution: The POUM Hypothesis," Working Papers 98-23, C.V. Starr Center for Applied Economics, New York University.
- Kandel, E. & Lazear, E.P., 1990.
"Peer Pressure and Partnerships,"
90-07, Rochester, Business - Managerial Economics Research Center.
- Bénabou, Roland, 1996.
"Inequality and Growth,"
CEPR Discussion Papers
1450, C.E.P.R. Discussion Papers.
- John M. Evans & Douglas C. Lippoldt & Pascal Marianna, 2001. "Trends in Working Hours in OECD Countries," OECD Labour Market and Social Policy Occasional Papers 45, OECD Publishing.
- Thomas Piketty, 1995.
"Social Mobility and Redistributive Politics,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 110(3), pages 551-584.
- Lindbeck, Assar & Nyberg, Sten & Weibull, Jörgen W., 1997.
"Social Norms and Economic Incentives in the Welfare State,"
Working Paper Series
476, Research Institute of Industrial Economics.
- Assar Lindbeck & Sten Nyberg & Jörgen W. Weibull, 1999. "Social Norms and Economic Incentives in the Welfare State," The Quarterly Journal of Economics, Oxford University Press, vol. 114(1), pages 1-35.
- Nalbantian, Haig & Schotter, Andrew, 1994.
"Productivity Under Group Incentives: An Experimental Study,"
94-04, C.V. Starr Center for Applied Economics, New York University.
- Nalbantian, Haig R & Schotter, Andrew, 1997. "Productivity under Group Incentives: An Experimental Study," American Economic Review, American Economic Association, vol. 87(3), pages 314-41, June.
- Alesina, Alberto Francesco & Glaeser, Edward Ludwig & Sacerdote, Burce, 2001.
"Why Doesn't the United States Have a European-Style Welfare State?,"
12502088, Harvard University Department of Economics.
- Alberto Alesina & Edward Glaeser & Bruce Sacerdote, 2001. "Why Doesn't the United States Have a European-Style Welfare State?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 32(2), pages 187-278.
- Kjell Arne Brekke & Snorre Kverndokk & Karinen Nyborg, 2000.
"An Economic Model of Moral Motivation,"
290, Statistics Norway, Research Department.
- Earl, Peter E, 1990.
"Economics and Psychology: A Survey,"
Royal Economic Society, vol. 100(402), pages 718-55, September.
- William A. Darity & Arthur H. Goldsmith, 1996. "Social Psychology, Unemployment and Macroeconomics," Journal of Economic Perspectives, American Economic Association, vol. 10(1), pages 121-140, Winter.
- Roland Benabou, 2000. "Unequal Societies: Income Distribution and the Social Contract," American Economic Review, American Economic Association, vol. 90(1), pages 96-129, March.
- Frey, Bruno S & Jegen, Reto, 2001. " Motivation Crowding Theory," Journal of Economic Surveys, Wiley Blackwell, vol. 15(5), pages 589-611, December.
- Kranich, Laurence, 2001.
" Altruism and the Political Economy of Income Taxation,"
Journal of Public Economic Theory,
Association for Public Economic Theory, vol. 3(4), pages 455-69.
- Laurence Kranich, 1998. "Altruism and the Political Economy of Income Taxation," Discussion Papers 98-05, University at Albany, SUNY, Department of Economics.
When requesting a correction, please mention this item's handle: RePEc:hpe:wpaper:y:2002:i:33. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ana Belén Miquel Burgos)
If references are entirely missing, you can add them using this form.