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Preferences and Coalitions

In: Income Modeling and Balancing

Author

Listed:
  • Thomas Kämpke

    (Research Institute for Applied Knowledge Processing (FAW/n))

  • Franz Josef Radermacher

    (University of Ulm)

Abstract

Redistribution of income is assumed to require the vote of at least 50 % of all individuals with income and each of them insists to be a winner from the redistribution. When inequality is to be increased in the interest of some, coalition partners must be found by compensation schemes. Compensation minimization is shown to lead to coalition partners being either a connected or a disconnected income group. When inequality reaches certain critical levels, disconnection becomes unavoidable. For one-parametric income distributions, the critical levels are denoted as bifurcation points. Values of bifurcation points are computed numerically for several one-parametric distributions. For income distributions with two or more parameters the bifurcation point is replaced by a bifurcation function.

Suggested Citation

  • Thomas Kämpke & Franz Josef Radermacher, 2015. "Preferences and Coalitions," Lecture Notes in Economics and Mathematical Systems, in: Income Modeling and Balancing, edition 127, chapter 0, pages 141-171, Springer.
    • Handle: RePEc:spr:lnechp:978-3-319-13224-2_9
    DOI: 10.1007/978-3-319-13224-2_9
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