An adverse social welfare effect of quadruply gainful trade

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Show simple item record Stark, Oded Kosiorowski, Grzegorz 2020-09-30T13:04:44Z 2020-09-30T13:04:44Z 2020-09-30
dc.identifier.other 1734039094 de_DE
dc.identifier.uri de_DE
dc.description.abstract Acknowledging that individuals dislike having low relative income renders trade less attractive when seen as a technology that integrates two economies by merging separate social spheres into one. We define a “trembling trade” as a situation in which gains from trade are less than losses in relative income, with the result that global social welfare is reduced. We show that a “trembling trade” can arise even when trade is more gainful in four ways: through trade the absolute income of everyone increases, the income gap in both economies is reduced, as is the income gap between the trading economies. However, trade brings populations, economies, or markets that were not previously connected closer together in social space. As a consequence, separate social spheres merge, and people’s social space and their comparators are altered. Assuming that people like high (absolute) income and dislike low relative income, the aggregate increase in unhappiness caused by the trade-induced escalation in relative deprivation can result in a negative overall impact of trade on (utilitarian-measured) social welfare, if the absolute income gains are not large enough to mitigate the relative income losses. en
dc.language.iso en de_DE
dc.publisher Universität Tübingen de_DE
dc.rights ubt-podno de_DE
dc.rights.uri de_DE
dc.rights.uri en
dc.subject.classification Sozialpolitik de_DE
dc.subject.ddc 330 de_DE
dc.subject.other Gains from trade en
dc.subject.other Increase of incomes en
dc.subject.other Decrease of income gaps en
dc.subject.other Integration en
dc.subject.other Change of social space en
dc.subject.other Low relative income en
dc.subject.other Quadruply gainful trade en
dc.subject.other “Trembling trade” en
dc.subject.other Social welfare en
dc.title An adverse social welfare effect of quadruply gainful trade en
dc.type Article de_DE
utue.publikation.fachbereich Wirtschaftswissenschaften de_DE
utue.publikation.fakultaet 6 Wirtschafts- und Sozialwissenschaftliche Fakultät de_DE
utue.opus.portal utwpbusinesseco de_DE
utue.publikation.source University of Tübingen Working Papers in Business and Economics ; No. 138 de_DE


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