Inequality and Public Resource Allocation

Debraj Ray and Joan Esteban ()

No 47, Working Papers from Barcelona School of Economics

Abstract: 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.

Keywords: inequality; resource allocation; lobbying; imperfect capital markets (search for similar items in EconPapers)
JEL-codes: C72 D31 D61 D73 (search for similar items in EconPapers)
Date: 2015-09
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://bw.bse.eu/wp-content/uploads/2015/09/747-file.pdf (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:bge:wpaper:47

Access Statistics for this paper

More papers in Working Papers from Barcelona School of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Bruno Guallar ().