Relative Advantage, Queue Jumping, and Welfare Maximizing Weath Distribution

Authors

Alex Coram
Lyle Noakes

Working Paper Number

2006-08

Publication Date

2006

Abstract

Suppose individuals get utilities from the total amount of wealth they hold and from their wealth relative to those immediately below them. This paper studies the distribution of wealth that maximizes an additive welfare function made up of these utilities. It interprets wealth distribution in a control theory framework to show that the welfare maximizing distribution may have unexpected properties. In some circumstances it requires that inequality be maximized at the poorest and richest ends of the distribution. In other circumstances it requires that all wealth be given to a single individual.

DOI

https://doi.org/10.7275/1068991

Recommended Citation

Coram, Alex and Noakes, Lyle, "Relative Advantage, Queue Jumping, and Welfare Maximizing Weath Distribution" (2006). Economics Department Working Paper Series. 34.
https://doi.org/10.7275/1068991