Will a government find it financially easier to neutralize a looming protest if more groups are involved?

Oded Stark and Ewa Zawojska

No 244570, Discussion Papers from University of Bonn, Center for Development Research (ZEF)

Abstract: We study a policy response to an increase in post-merger social stress. If a merger of groups of people is viewed as a revision of their social space, then the merger alters people’s comparators and increases social stress: the social stress of a merged population is greater than the sum of the levels of social stress of the constituent populations when apart. We use social stress as a proxy measure for looming social protest. As a response to the post-merger increase in social stress, we consider a policy aimed at reversing the negative effect of the merger by bringing the social stress of the merged population back to the sum of the pre-merger levels of social stress of the constituent populations when apart. We present, in the form of an algorithm, a cost-effective policy response which is publicly financed and does not reduce the incomes of the members of the merged population. We then compare the financial cost of implementing such a policy when the merger involves more or fewer groups. We show that the cost may fall as the number of merging groups rises.

Keywords: Institutional and Behavioral Economics; Public Economics (search for similar items in EconPapers)
Pages: 21
Date: 2016-08
New Economics Papers: this item is included in nep-sog
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https://ageconsearch.umn.edu/record/244570/files/ZEF%20DP_224.pdf (application/pdf)

Related works:
Journal Article: Will a government find it financially easier to neutralize a looming protest if more groups are involved? (2016)
Working Paper: Will a government find it financially easier to neutralize a looming protest if more groups are involved? (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:ubzefd:244570

DOI: 10.22004/ag.econ.244570

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