CeDEx Brown Bag Seminar - Jona Krutaj

Title: Can leaders solve normative conflicts by promoting redistribution?

Abstract: The presence of group members deriving different returns from contributing to a public good generates a normative conflict between equality and efficiency. We propose different principles to group members on which they can coordinate, including a redistribution mechanism that assures both efficiency and equality through reciprocity. We show that a large majority of individuals are in favour of this mechanism. However, they are unable to coordinate to implement it in their heterogeneous groups. The introduction of a leader who can make recommendations to the other group members enables a majority of groups to implement the mechanism with full contributions and ex-post equality of earnings through redistribution.