Income inequality in the United States of America has increased over the past few decades. Along with this development, employee compensation as a share of national income has tended to decline, the profi t share of national income has grown, and inequality within labour has risen. There is no empirical support for the argument that greater inequality has resulted in faster productivity growth,...

This paper explores how wealth and inequality can affect self-governed solutions to commons dilemmas by constraining group cooperation. It reports a series of experiments in the field where subjects are actual commons users. Household data about the participants’ context explain statistically the usually observed wide variation found within and across groups in similar experiments. Participants...

It is possible to partially order cities according to the informativeness of neighborhoods about their ethnic groups. It is also possible to partially order cities with two ethnic groups according to the Lorenz criterion. We show that a segregation order satisfies four well-established segregation principles if and only if it is consistent with the informativeness criterion. We then use this re...

Our research is a variant of the third party punishment game that we call Solomon’s Game. The main feature of this game is that players can not only punish unfair people but also help those individuals who are the victims of that unfairness. The aim of this experiment is to compare the human tendency to punish unfair behavior to the desire to help victims of that unfairness, in presence of a bu...

We study a fundamental conflict in economic decision-making, the trade-off between equality, equity and incentives, in a new experimental game that nests a voluntary contributions mechanism in a broader spectrum of incentive schemes. In a 2x2 design, we let subjects either vote on or exogenously encounter incentive settings while assigned unequal endowments are either task-determined or random....

Does individual well-being depend on the absolute level of income and consumption or is it relative to one’s aspirations? In a direct empirical test, it is found that higher income aspirations reduce people’s utility, ceteris paribus. Thereby, individual data on reported satisfaction with life are used as a proxy measure for utility, and income evaluation measures are applied as proxies for peo...

Discounting the utilities of future people or giving smaller weights to groups other than one’s own is often criticized on the grounds that the resulting objective function differs from the ethically appropriate one. This paper investigates the consequences of changes in the discount factor and weights when they are moved toward the warranted ones. Using the utilitarian value function, it is sh...

We reconsider the problem of ordering infinite utility streams. As has been established in earlier contributions, if no representability condition is imposed, there exist strongly Paretian and finitely anonymous orderings of intertemporal utility streams.We examine the possibility of adding suitably formulated versions of classical equity conditions. First, we provide a characterization of all ...

A group of agents participate in a cooperative enterprise producing a single good. Each participant contributes a particular type of input; output is nondecreasing in the input pro…le. How should it be shared? We analyze the implications of the axiom of Group Monotonicity: if a group of agents simultaneously decrease their input, not all of them should receive a bigger share of output. We show ...

Research in psychology indicates that individuals often make inferences regarding unknown individual qualities based on potentially irrelevant (but socially observable) information. This paper explores occupational choices when individuals receive imprecise signals regarding ability and use the observable characteristics of previously successful individuals to infer own ability. Individuals who...