EconPapers    
Economics at your fingertips  
 

The Social Contracts with Endogenous Sentiments

Joan Esteban () and Laurence Kranich ()

No 71, Working Papers from Barcelona Graduate School of Economics

Abstract: We present a model in which an individual's sentiments toward others are determined endogenously on the basis of how they perform relative to the societal average. This, in turn, affects the individual's own behavior and hence other agent's sentiments toward her. We focus on stationary patterns of utility interdependence in a production economy with redistributive taxation. There are two types of stationary equilibria: one in which all agents conform to the societal norm, and a second involving social stratification on the basis of productivity into two or three groups. We show that both types of social contract can be sustained as a political equilibrium. In the cohesive equilibrium with high redistribution, sentiments will be such that a majority of individuals will support high taxation, while in the clustered society with low redistribution the majority of voters will be in favor of keeping taxes low.

Keywords: Endogenous altruism; income taxation; social contract (search for similar items in EconPapers)
JEL-codes: D50 D64 D72 D31 E62 (search for similar items in EconPapers)
Date: 2003-06
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.barcelonagse.eu/sites/default/files/working_paper_pdfs/71.pdf (application/pdf)

Related works:
Working Paper: The Social Contract with Endogenous Sentiments (2007) Downloads
Working Paper: The Social Contract with Endogenous Sentiments (2007) Downloads
Working Paper: The Social Contract with Endogenous Sentiments (2006) Downloads
Working Paper: The Social Contract with Endogenous Sentiments (2006) Downloads
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:71

Access Statistics for this paper

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

 
Page updated 2020-05-23
Handle: RePEc:bge:wpaper:71