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A bitter choice turned sweet: How acknowledging individuals' concern at having a low relative income serves to align utilitarianism and egalitarianism

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

Abstract

When individuals' utility is a convex combination of their income and their concern at having a low relative income (the weights attached to income and to the concern at having a low relative income sum up to one), the maximization of aggregate utility yields an equal income distribution. This alignment of utilitarianism and egalitarianism is obtained for any number of individuals, and for general utility functions that are convex combinations of a power function of income and the concern at having a low relative income. The alignment can also hold when the weights sum up to a number different than one.

Suggested Citation

  • Stark, Oded & Jakubek, Marcin & Kobus, Martyna, 2015. "A bitter choice turned sweet: How acknowledging individuals' concern at having a low relative income serves to align utilitarianism and egalitarianism," University of Tübingen Working Papers in Business and Economics 81, University of Tuebingen, Faculty of Economics and Social Sciences, School of Business and Economics.
    • Handle: RePEc:zbw:tuewef:81
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    2. Czyżewski, Andrzej & Kryszak Łukasz, 2017. "Farmers’ And Rural Households’ Income, Symptoms Of Material Deprivation In Poland’S Countryside," Journal of Agribusiness and Rural Development, University of Life Sciences, Poznan, Poland, vol. 44(2), June.

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    More about this item

    Keywords

    Utilitarianism; Egalitarianism; Social welfare maximization; Low relative income;
    All these keywords.

    JEL classification:

    • H0 - Public Economics - - General
    • I0 - Health, Education, and Welfare - - General
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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