2018
DOI: 10.4236/tel.2018.810107
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National Identity and Social Welfare

Abstract: This paper investigates the relationship between national identification and social welfare. Society is a direct democracy where representative rich and poor agents vote on their most preferred tax rate. Utilizing the economics of identity, agent utility not only depends on income but also on social identification. We show that national identification increases agent utility and social welfare when the rich implements the most preferred tax rate of the poor, who is also the median voter. Furthermore, using res… Show more

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Cited by 2 publications
(1 citation statement)
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“…We model the poor's utility using the economics of identity from Akerlof and Kranton [4], which state that individuals not only derive utility from income, but also from social group identification. Following Shayo [14], Sambanis and Shayo [5], and Tan, Lee and Ng [16], the post-tax utility of a citizen is…”
Section: ) Consumption Takes Place and The Game Endsmentioning
confidence: 99%
“…We model the poor's utility using the economics of identity from Akerlof and Kranton [4], which state that individuals not only derive utility from income, but also from social group identification. Following Shayo [14], Sambanis and Shayo [5], and Tan, Lee and Ng [16], the post-tax utility of a citizen is…”
Section: ) Consumption Takes Place and The Game Endsmentioning
confidence: 99%