Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/283140 
Year of Publication: 
2023
Series/Report no.: 
ZEF Discussion Papers on Development Policy No. 324
Publisher: 
University of Bonn, Center for Development Research (ZEF), Bonn
Abstract: 
We model an environment in which individuals prefer to be in a space in which their rank is higher, be it a social space, a geographical space, a work environment, or any other comparison sphere which we refer to in this paper, and without loss of generality, as a region. When the individuals can choose between more than two regions, we inquire: (i) whether a steady-state distribution of the population is reached; (ii) how long it will take to reach a steady state; and (iii) if a steady state obtains, whether at the steady state social welfare is maximized. Despite the fact that when there are three or more regions the mobility paths are more intricate than when there are only two regions, we prove that a steady-state distribution of the population across the regions is reached; we identify the upper bound of the number of time periods that it will take to reach the steady-state distribution; and we show that the steady-state distribution maximizes social welfare. This last result is surprising: even though the individuals act of their own accord, they achieve the socially preferred outcome.
Subjects: 
Inter-space mobility
Three or more spaces
Ordinal preferences
Distaste for low rank
Steady-state population distribution
Social welfare
JEL: 
C61
C62
D50
D60
D62
I31
R13
R23
Z13
Document Type: 
Working Paper

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