This paper analyzes distributive justice in the presence of collective responsibility. We consider a society partitioned into groups, where three types of characteristics affect individual outcomes: circumstances for which neither individuals nor groups are responsible, collective responsible factors for which groups, but not individuals, bear responsibility, and personal responsible factors for which individuals are responsible. We propose two allocation rules: (i) group conditional equality and (ii) group egalitarian equivalence. Both solutions use a two-step procedure in which inter-group resource allocation is determined, and intra-group distribution second. This approach respects both individual agency within groups and collective responsibility across groups. We examine the basic properties of these allocation rules and offer axiomatic characterizations of them. For the characterizations, we extend the classical principles of natural reward and compensation developed by Marc Fleurbaey to the collective responsibility setting.
The Experimental Dictator Game (DG) continues to spark the question why most dictators transfer nontrivial proportions of the money available to them. This exploratory study analyzes the effects of two innovative design variations on transfer rates and provides new evidence on transfer determination in the DG. First, recipients suggest allocations of funds before dictators make transfer decisions, allowing a comparison between recipient and computer suggestions. Second, follow-up requests allow dictators to increase initial transfer choices and/or to donate to a charity. The findings show that, on average, dictators’ transfers increase with the recipient’s suggestion up to the equal split and remain steady when demands exceed the equal split. Transfers were also higher when a computer suggested an allocation compared to the DG benchmark, challenging the idea that interpersonal communication alone leads to increasing transfer rates. Dictators increased transfers further when they received follow-up requests. In this case, average total transfer rates exceeded 50
In 1962, the town of Centralia, Pennsylvania was forever changed when an abandoned coal mine caught fire. The local, state and federal government spent 21 years and 3.3 million trying to stop the mine fire from spreading but eventually the town was evacuated. In this paper, we illustrate how major contributions from Elinor Ostrom and Ronald Coase can provide insight into why public and private organizations failed to effectively cooperate and end the environmental disaster. Specifically, we develop a political economy framework to explore how positive transaction costs prevented parties from overcoming collective action problems in a polycentric system with nested externalities. Using a case study approach, we apply this framework to the Centralia mine fire. We show that public and private organizations likely faced positive transaction costs caused by uncertainty, heterogeneous preferences, asymmetric information and compliance issues. Finally, we address how the failure in Centralia can serve as a lesson for other nested externalities facing positive transaction costs.
The discovery of exceptional young football talent has long been perceived as an opportunity to uncover highly valuable assets at an early stage of their development. The rarity of such players, combined with the potentially substantial financial and sporting returns associated with identifying them early, creates strong incentives for clubs to invest in youth talent. Yet the uncertainty surrounding their future performance and market value may also lead decision-makers to depart from purely rational investment behaviour. Following the 1995 European Court of Justice (ECJ)’s Bosman ruling, as well as the substantial increase in television rights revenues and the growing involvement of private equity funds in sports, transfer fees have skyrocketed since the mid-1990s, considerably increasing clubs’ squad-management and budgetary pressures. Transfer fees for young players have not been immune to this trend. As a result, the choice between developing young players internally and acquiring young talent externally has become a central strategic issue. While recent research highlights the effectiveness of hybrid strategies combining both approaches, this paper focuses specifically on the efficiency of investing in externally acquired players aged 18–23. Using transfer data from the Big Five European leagues between 2012 and 2022, the study shows that the returns on such investments depend not only on player characteristics and transfer costs, but also on team-specific factors.
In 2021, the Saudi Arabia-backed LIV Golf was announced and soon shook the golf world by signing scores of golfers to join their upstart circuit and leave the dominant, century-old PGA Tour or other professional leagues. With data on the top 1,000 golfers in the world rankings, here I consider what drove golfers to accept a contract offer from LIV Golf. The tradeoff for top golfers was clear. While the PGA Tour was well established and internationally respected, financial rewards were almost entirely contingent on tournament-by-tournament performance. LIV Golf, while unproven, effectively unaccredited, and a product of Saudi Arabian monarch-ruled government, offered golfers signing bonuses, effectively guaranteeing their salary, while also giving them an easier path to win lucrative tournament prize money. The data clearly indicate that golfers in a state of decline were more likely to sign with LIV. That is, a logistic regression shows that LIV had more success signing golfers whose world ranking had dropped, who were playing fewer events per year, and were under-performing in the events they did play. The results offer insight into how professional athletes estimate their own value and speak to the potential vulnerability of established sports entities when challenged by well-funded upstarts. The apparent limited effects of golfers’ personal politics are also notable.
