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Interdependent preferences in the design of equal-opportunity policies

Inequality and Opportunity: Papers from the Second ECINEQ Society Meeting

ISBN: 978-1-84855-134-3, eISBN: 978-1-84855-135-0

Publication date: 15 October 2008

Abstract

We study mechanisms to construct equal-opportunity policies for resource allocation. In our model, agents enjoy welfare as a function of the effort they expend and the amount of a socially provided resource they consume. Nevertheless, agents have interdependent preferences, that is, they not only care about their own allocation, but also about their peers’ allocations. As in the standard approach to equality of opportunity, the aim is to allocate the social resource so that welfare across individuals at the same relative effort level is as equal as possible. We show how pursuing this same aim while assuming that agents have interdependent preferences might crucially alter the results.

Citation

Moreno-Ternero, J.D. (2008), "Interdependent preferences in the design of equal-opportunity policies", Bishop, J. and Zheng, B. (Ed.) Inequality and Opportunity: Papers from the Second ECINEQ Society Meeting (Research on Economic Inequality, Vol. 16), Emerald Group Publishing Limited, Leeds, pp. 49-65. https://doi.org/10.1016/S1049-2585(08)16003-3

Publisher

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Emerald Group Publishing Limited

Copyright © 2008, Emerald Group Publishing Limited