This chapter reviews the theory of the voluntary public and private redistribution of wealth elaborated by economic analysis in the last forty years or so. The central object of the theory is altruistic gift-giving, construed as benevolent voluntary redistribution of income or wealth. The theory...

In a model where cooperation is beneficial, but subject to cheating, and is supported by trigger strategy punishments in a repeated game, we explore the relationship between the nature of cooperation (size and composition of coalitions) and underlying inequality in the distribution of private...

We study the effect of power sharing over income redistribution among different socio-economic groups in a model of redistributive politics with fairness concern. We prove that a unique pure-strategy equilibrium exists under fairly general conditions; and we show that equilibrium transfers...

One cannot doubt the ubiquitous lack of hope and confidence in the so-called democratic institutions by the large majority of people. The fundamental reason thereof is the blatant contradiction between the principle of democracy, promoting the rule of law and thereby the welfare of people, and...

This paper develops a model of political consensus in order to explain the missing link between inequality and political redistribution. Political consensus is an implicit agreement not to vote for extreme policy proposals. We show that such an agreement may play an efficiency-enhancing role....

We analyze a political competition model of redistributive policies. We provide an equilibrium existence result and a full characterization of the net transfers to the different income groups. We also derive several testable predictions about the way in which the net group transfers and the...

This paper studies the constructive nature of social welfare orders on infinite utility streams defined on X= Y^N, satisfying the Pigou-Dalton transfer principle (PD), which are known to be representable (see Alcantud (2010) and Sakamoto (2012)).We describe the restrictions on domain Y for...

We study the design of a team in multi-team contests.Is it better to distribute prizes among players equally, or to just one player? And is it better to spend a budget on a diverse team with stars and rookies, or on an equal team? First, we study these questions theoretically. We f i nd that...

How should we make value judgments about wealth inequality? Harsanyi (1953) proposes to take an individual who evaluates her well-being by expected utility and ask her to evaluate the wealth possibilities ex-ante (i.e. before she finds her place in society, i.e., under the "veil of ignorance" of...

This Paper presents theory and evidence on the relationship between inequality and institutional quality. We exhibit a model in which the two dynamically reinforce each other and set to test this relationship with a broad array of institutional measures. We establish the double causality between...