Inequality and Public Resource Allocation

We set up a signaling game where individuals differ in ability and wealth. Higher ability means larger benefit supported by the government. Costly signals are used to transmit information regarding own deservingness. However, capital market imperfections may perturb the signals by limiting the capacity of poor people to send the appropriate signal. We examine the cost in efficiency produced by the existing inequality in the distribution of wealth.

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Year of publication:	2003-06
Authors:	Esteban, Joan ; Ray, Debraj
Institutions:	Barcelona Graduate School of Economics (Barcelona GSE)
Subject:	Inequality \| resource allocation \| lobbying \| imperfect capital markets

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Extent:	application/pdf
Series:	Working Papers.
Type of publication:	Book / Working Paper
Notes:	Number 47
Classification:	D31 - Personal Income, Wealth and Their Distributions ; D61 - Allocative Efficiency; Cost-Benefit Analysis ; D73 - Bureaucracy; Administrative Processes in Public Organizations; Corruption ; C72 - Noncooperative Games
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010547130