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Distributive Politics with Other-Regarding Preferences

Author

Listed:
  • Ming Tung Le
  • Alejandro Saporiti
  • Yizhi Wang

Abstract

We extend upon the results of Lindbeck and Weibull [Public Choice 52 (3), (1987)] to study distributive politics when voters have not only self-interested preferences, but also other-regarding concerns. We consider a broad family of otherregarding behavior (including fairness preferences, income-dependent altruism, and inequality aversion), for which results on equilibrium existence and optimality have not been established yet. We provide a sufficient condition for smooth and nonsmooth payoffs that generalizes Lindbeck and Weibull’s condition, and guarantees the existence of a unique Nash equilibria in pure strategies. In addition, we determine conditions under which the equilibrium results in an income distribution that can be rationalised as the outcome of maximizing a mixture of a “self-regarding utilitarian” social welfare function and society’s other-regarding preferences.

Suggested Citation

  • Ming Tung Le & Alejandro Saporiti & Yizhi Wang, 2018. "Distributive Politics with Other-Regarding Preferences," Economics Discussion Paper Series 1804, Economics, The University of Manchester.
    • Handle: RePEc:man:sespap:1804
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    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation

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