Reconciling the Rawlsian and the Utilitarian Approaches to the Maximization of Social Welfare

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Dokumentart: WorkingPaper
Date: 2013
Source: University of Tübingen Working Papers in Economics and Finance ; 65
Language: German
Faculty: 6 Wirtschafts- und Sozialwissenschaftliche Fakultät
Department: Wirtschaftswissenschaften
DDC Classifikation: 330 - Economics
Keywords: Soziale Wohlfahrt
Other Keywords:
Maximization of social welfare , Rawlsian social welfare function , Utilitarian social welfare function , Deadweight loss , Distaste for low relative
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Under a deadweight loss of tax and transfer, there is tension between the optimal policy choices of a Rawlsian social planner and a utilitarian social planner. However, when with a weight greater than a certain critical value the individuals’ utility functions incorporate distaste for low relative income, a utilitarian will select exactly the same income distribution as a Rawlsian.

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