Will a government find it financially easier to neutralize a looming protest if more groups are involved?

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URI: http://hdl.handle.net/10900/71937
http://nbn-resolving.de/urn:nbn:de:bsz:21-dspace-719371
http://dx.doi.org/10.15496/publikation-13349
Dokumentart: Aufsatz
Date: 2016-08-31
Source: University of Tübingen Working Papers in Economics and Finance ; 91
Language: English
Faculty: 6 Wirtschafts- und Sozialwissenschaftliche Fakultät
6 Wirtschafts- und Sozialwissenschaftliche Fakultät
Department: Wirtschafts- und Sozialwissenschaftliche Fakultät
DDC Classifikation: 330 - Economics
Keywords: Volkswirtschaft
Other Keywords:
Merger of populations
Revision of social space
Aggregate relative deprivation
Social stress
A cost-effective policy response
License: Publishing license excluding print on demand
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Abstract:

We study a policy response to an increase in post-merger social stress. If a merger of groups of people is viewed as a revision of their social space, then the merger alters people’s comparators and increases social stress: the social stress of a merged population is greater than the sum of the levels of social stress of the constituent populations when apart. We use social stress as a proxy measure for looming social protest. As a response to the post-merger increase in social stress, we consider a policy aimed at reversing the negative effect of the merger by bringing the social stress of the merged population back to the sum of the pre- merger levels of social stress of the constituent populations when apart. We present, in the form of an algorithm, a cost-effective policy response which is publicly financed and does not reduce the incomes of the members of the merged population. We then compare the financial cost of implementing such a policy when the merger involves more or fewer groups. We show that the cost may fall as the number of merging groups rises.

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