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Inequality and Inefficiency in Joint Projects

Author

Listed:
  • Debraj Ray

    (SUNY - State University of New York, IAE - Instituto de Analisis Economico - CSIC - Consejo Superior de Investigaciones Cientificas [España] = Spanish National Research Council [Spain])

  • Jean-Marie Baland

    (CRED - Centre de Recherche en Economie du Developpement - FUNDP - Facultés Universitaires Notre Dame de la Paix)

  • Olivier Dagnelie

    (CRED - Centre de Recherche en Economie du Developpement - FUNDP - Facultés Universitaires Notre Dame de la Paix)

Abstract
A group of agents voluntarily participates in a joint project, in which efforts are not perfectly substitutable. The output is divided according to some given vector of shares. A share vector is unimprovable if no other share vector yields a higher sum of payoffs. When the elasticity of substitution across efforts is two or lower, only the perfectly equal share vector is unimprovable, and all other vectors can be improved via Lorenz domination. For higher elasticities of substitution, perfect equality is no longer unimprovable. Our results throw light on the connections between inequality and collective action.

Suggested Citation

  • Debraj Ray & Jean-Marie Baland & Olivier Dagnelie, 2007. "Inequality and Inefficiency in Joint Projects," Post-Print halshs-00160753, HAL.
    • Handle: RePEc:hal:journl:halshs-00160753
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00160753
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    References listed on IDEAS

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    Keywords

    Inequality; Collective Action; Substitutability;
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