Related papers: Resolving Aaron's Social Insurance Paradox
The implementation of a supervision and incentive process for identical workers may lead to wage variance that stems from employer and employee optimization. The harder it is to assess the nature of the labor output, the more important such…
This paper develops a new model of business cycles. The model is economical in that it is solved with an aggregate demand-aggregate supply diagram, and the effects of shocks and policies are obtained by comparative statics. The model builds…
We analyze inequality aspects of the agent-based model of capitalist economy named it Social Architecture of Capitalism that has been introduced by Ian Wright. The model contemplates two main types of agents, workers and capitalists, which…
In our multi-agent model agents generate wealth from repeated interactions for which a prisoner's dilemma payoff matrix is assumed. Their gains are taxed by a government at a rate $\alpha$. The resulting budget is spent to cover…
This tutorial article puts forth a framework to analyze the noncooperative strategic interactions among the members of a large population of bounded rationality agents. Our approach hinges on, unifies and generalizes existing methods and…
Human aging is marked by a steady rise in the risk of dying with age-a process demographers call senescence. Over the past century, life expectancy has risen dramatically, but is this because we are aging slower, or simply starting it…
We consider the problem of repeatedly choosing policies to maximize social welfare. Welfare is a weighted sum of private utility and public revenue. Earlier outcomes inform later policies. Utility is not observed, but indirectly inferred.…
According to the proportional allocation mechanism from the network optimization literature, users compete for a divisible resource -- such as bandwidth -- by submitting bids. The mechanism allocates to each user a fraction of the resource…
A mathematical model of measurement of the perception of well-being for groups with increasing incomes, but proportionally unequal is proposed. Assuming that welfare grows with own income and decreases with relative inequality (income of…
This study investigates possibility and impossibility results of the repugnant and sadistic conclusions in population ethics and economics. The repugnant conclusion says that an enormous population with very low well-being is socially…
An inconsistent knowledge base can be abstracted as a set of arguments and a defeat relation among them. There can be more than one consistent way to evaluate such an argumentation graph. Collective argument evaluation is the problem of…
This paper studies an incentive structure for cooperation and its stability in peer-assisted services when there exist multiple content providers, using a coalition game theoretic approach. We first consider a generalized coalition…
Using a lifecycle framework with Epstein-Zin (1989) utility and a mixed-integer optimization approach, we compute the optimal age to claim Social Security benefits. Taking advantage of homogeneity, a sufficient statistic is the ratio of…
We prove the existence of a Radner equilibrium in a model with population growth and analyze the effects on asset prices. A finite population of agents grows indefinitely at a Poisson rate, while receiving unspanned income and choosing…
This paper links matching markets with aligned preferences to optimal transport theory. We show that stability, efficiency, and fairness emerge as solutions to a parametric family of optimal transport problems. The parameter reflects…
Strong empirical evidence from laboratory experiments, and more recently from population surveys, shows that individuals, when evaluating their situations, pay attention to whether they experience gains or losses, with losses weighing more…
We introduce the problem of assigning resources to improve their utilization. The motivation comes from settings where agents have uncertainty about their own values for using a resource, and where it is in the interest of a group that…
Artificial intelligence (AI) is advancing exponentially and is likely to have profound impacts on human wellbeing, social equity, and environmental sustainability. Here we argue that the "alignment problem" in AI research is also an…
There has been a flurry of research in recent years on notions of fairness in ranking and recommender systems, particularly on how to evaluate if a recommender allocates exposure equally across groups of relevant items (also known as…
This paper provides a new theory of the observed co-movement between overall wage inequality and its between-firm component. We develop and solve analytically a frictionless sorting model with two-sided heterogeneity, in which firms consist…