Markus Ridder defends his thesis “Essays on Polarization and Inequality”

The thesis examines how social interactions and policy changes contribute to disparities in opinions, socioeconomic outcomes, and wealth. Through three self-contained essays, Markus investigates the mechanisms driving opinion polarization in social networks, the biases in educational expectations shaped by socioeconomic segregation, and the effects of transitioning from a comprehensive to a dual tax system on wealth inequality. These essays underscore the role of evolving social networks in driving long-term disparities, using theoretical and quantitative models to capture the dynamic processes involved.

The thesis makes three key contributions. First, Markus demonstrates that when social networks evolve based on individual actions, they can form echo chambers, leading to persistent opinion polarization.

Second, he shows how segregation within social networks can perpetuate biased expectations about the value of education, leading to the intergenerational persistence of socioeconomic inequality.

Third, Marcus examines the shift from a comprehensive to a dual tax system and find that this policy change increases wealth inequality while also leading to higher savings and greater entrepreneurial activity.

These findings provide important insights into how social dynamics and behavior can interact to sustain or amplify inequalities over time, with implications for both economic theory and policy-making.

Read the thesis here