The sustainability of contribution norms with income dynamics

Pau Juan-Bartroli and Esteban Mu\~noz-Sobrado

Papers from arXiv.org

Abstract: The sustainability of cooperation is crucial for understanding the progress of societies. We study a repeated game in which individuals decide the share of their income to transfer to other group members. A central feature of our model is that individuals may, with some probability, switch incomes across periods, our measure of income mobility, while the overall income distribution remains constant over time. We analyze how income mobility and income inequality affect the sustainability of contribution norms, informal agreements about how much each member should transfer to the group. We find that greater income mobility facilitates cooperation. In contrast, the effect of inequality is ambiguous and depends on the progressivity of the contribution norm and the degree of mobility. We apply our framework to an optimal taxation problem to examine the interaction between public and private redistribution.

Date: 2025-10
New Economics Papers: this item is included in nep-evo and nep-soc
References: Add references at CitEc
Citations:

Downloads: (external link)
http://arxiv.org/pdf/2510.26503 Latest version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2510.26503

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().