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

Oded Stark and Ewa Zawojska

No 91, University of Tübingen Working Papers in Business and Economics from University of Tuebingen, Faculty of Economics and Social Sciences, School of Business and Economics

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 premerger 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: Merger of populations; Revision of social space; Aggregate relative deprivation; Social stress; A cost-effective policy response (search for similar items in EconPapers)
JEL-codes: D04 D63 F55 H53 P51 (search for similar items in EconPapers)
Date: 2016
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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:zbw:tuewef:91

DOI: 10.15496/publikation-13349

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