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A concern about low relative income, and the alignment of utilitarianism with egalitarianism

  • Stark, Oded
  • Kobus, Martyna
  • Jakubek, Marcin

A utilitarian social planner who maximizes social welfare assigns the available income to those who are most efficient in converting income into utility. However, when individuals are concerned about their income falling behind the incomes of others, the optimal income distribution under utilitarianism is equality of incomes.

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Paper provided by University of Tuebingen, Faculty of Economics and Social Sciences in its series University of Tuebingen Working Papers in Economics and Finance with number 21.

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Date of creation: 2011
Date of revision:
Handle: RePEc:zbw:tuewef:21
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  1. Tinbergen, Jan, 1970. "A Positive and a Normative Theory of Income Distribution," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 16(3), pages 221-34, September.
  2. Stark, Oded & Fan, C. Simon, 2009. "A Theory of Migration as a Response to Occupational Stigma," Discussion Papers 55363, University of Bonn, Center for Development Research (ZEF).
  3. Hyll, Walter & Stark, Oded, 2011. "On the economic architecture of the workplace: repercussions of social comparisons amongst heterogeneous workers," University of Tuebingen Working Papers in Economics and Finance 6, University of Tuebingen, Faculty of Economics and Social Sciences.
  4. Stark, Oded & Hyll, Walter, 2010. "Endogenous Selection of Comparison Groups, Human Capital Formation, and Tax Policy," MPRA Paper 28909, University Library of Munich, Germany.
  5. Oded Stark, 2010. "Looking at the Integration of Nations through the Lens of the Merger of Populations: Preliminary Superadditivity and Impossibility Results," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 146(IV), pages 661-675, December.
  6. repec:tpr:qjecon:v:120:y:2005:i:3:p:963-1002 is not listed on IDEAS
  7. Erzo F.P. Luttmer, 2004. "Neighbors as Negatives: Relative Earnings and Well-Being," NBER Working Papers 10667, National Bureau of Economic Research, Inc.
  8. Stark, Oded & Fan, C. Simon, 2010. "Migration for degrading work as an escape from humiliation," MPRA Paper 28905, University Library of Munich, Germany.
  9. repec:adr:anecst:y:2001:i:63-64:p:04 is not listed on IDEAS
  10. repec:adr:anecst:y:2001:i:63-64:p:03 is not listed on IDEAS
  11. Stark, Oded & Taylor, J Edward, 1991. "Migration Incentives, Migration Types: The Role of Relative Deprivation," Economic Journal, Royal Economic Society, vol. 101(408), pages 1163-78, September.
  12. repec:tpr:qjecon:v:93:y:1979:i:2:p:321-24 is not listed on IDEAS
  13. Sen, Amartya, 1973. "On Economic Inequality," OUP Catalogue, Oxford University Press, number 9780198281931, July.
  14. Blanchflower, David G. & Oswald, Andrew J., 2007. "Hypertension and Happiness across Nations," IZA Discussion Papers 2633, Institute for the Study of Labor (IZA).
  15. Zizzo, D.J. & Oswald, A., 2000. "Are People Willing to Pay to Reduce Others' Incomes?," The Warwick Economics Research Paper Series (TWERPS) 568, University of Warwick, Department of Economics.
  16. Wagner, Alfred, 1891. "Marshall's Principles of Economics," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 5, pages 319-338.
  17. Fliessbach, Klaus & Weber, Bernd & Trautner, P. & Dohmen, Thomas J. & Sunde, Uwe & Elger, C. E. & Falk, Armin, 2007. "Social comparison affects reward-related brain activity in the human ventral striatum," Munich Reprints in Economics 20362, University of Munich, Department of Economics.
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