Interdependent preferences in the design of equal-opportunity policies

Abstract

We study mechanisms to construct equal-opportunity policies for resource allocation. In our model agents enjoy welfare as a function of the effort they expend, and the amount of a socially provided resource they consume. Nevertheless, agents have interdependent allocations. As in the standard approach to equality of opportunity, the aim is to allocate the social resource so that welfare across individuals at the same relative effort level is as equal as possible. We show how pursuing this same aim while assuming that agents have interdependent preferences might crucially alter the results.equality of opportunity, interdependent preferences, social policies, compensation, responsibility.