I have read that both Libya and Saudi Arabia are offering cash to “loyal” subjects. In Libya, $400 is to be given to each family and Saudi Arabia has budgeted $35 billion to be given which works out to roughly $2,000 per person. Now, the Beatles told us that money can’t buy you love. Should the self interested leaders focus their transfer efforts on the young men? If the old and the women have more bread, does this buy the peace? The economics of price discrimination tells us that you don’t offer a coupon to people who always buy the product or will never buy the product — you focus your incentives efforts on those “at the margin”. In the case of the nascent revolution, do the leaders of these nations have incentives to “transfer discriminate” and focus their payoffs on demographic subgroups? With a fixed pot of $, targeting subgroups of the population would allow the leaders to make nicer offers.
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