Abstract
We extend upon the results of Lindbeck and Weibull [Public Choice 52 (3), 1987] to study distributive politics when voters have not only self-interested preferences, but also other-regarding concerns. We consider a broad family of other-regarding behavior (including fairness preferences, income-dependent altruism, and inequality aversion), for which results on equilibrium existence and optimality have not been established yet. We provide a sufficient condition for smooth and non-smooth payoffs that generalizes Lindbeck and Weibull's condition, and guarantees the existence of a unique Nash equilibrium in pure strategies. In addition, we determine conditions under which the equilibrium results in an income distribution that can be rationalised as the outcome of maximizing a mixture of a "self-regarding utilitarian" social welfare function and society's other-regarding preferences.
| Original language | English |
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| Place of Publication | Manchester, UK |
| Publisher | Social Science Research Network |
| Pages | 1-16 |
| Number of pages | 16 |
| Publication status | Unpublished - 2018 |
Keywords
- Redistribution
- Other-Regarding Preferences
- Non-smooth Optimization