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Individual social welfare preferences: An experimental study

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  • Hong, Hao
  • Ding, Jianfeng
  • Yao, Yang

Abstract

This paper studies individual social welfare preferences when facing a trade-off between equality and efficiency using a modified distribution game in which subjects decide the income of two other subjects under different budgets and different “prices of equality.” We found that over half of the subjects made choices consistent with the generalized axiom of revealed preference. We then estimated individual social welfare preferences and found that the subjects had a wide range of preferences for equality and efficiency, although the majority weakly preferred efficiency over equality.

Suggested Citation

  • Hong, Hao & Ding, Jianfeng & Yao, Yang, 2015. "Individual social welfare preferences: An experimental study," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 57(C), pages 89-97.
    • Handle: RePEc:eee:soceco:v:57:y:2015:i:c:p:89-97
    DOI: 10.1016/j.socec.2015.05.002
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    Cited by:

    1. Ambec, Stefan & Garapin, Alexis & Muller, Laurent & Rahali, Bilel, 2019. "How institutions shape individual motives for efficiency and equity: Evidence from distribution experiments," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 81(C), pages 128-138.
    2. Bilal El Rafhi & Alexandre Volle, 2020. "The Effect of the Arab Spring on Preferences for Redistribution in Egypt," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 66(4), pages 875-903, December.
    3. Keigo Inukai & Yuta Shimodaira & Kohei Shiozawa, 2022. "Revisiting CES utility functions for distributional preferences: Do people face the equality–efficiency trade-off?," ISER Discussion Paper 1195r, Institute of Social and Economic Research, Osaka University, revised Sep 2024.
    4. Verena Kurz & Andreas Orland & Kinga Posadzy, 2018. "Fairness versus efficiency: how procedural fairness concerns affect coordination," Experimental Economics, Springer;Economic Science Association, vol. 21(3), pages 601-626, September.
    5. Ambec, Stefan & Garapin, Alexis & Muller, Laurent & Rahali, Bilel, 2016. "Trading off between equity and efficiency in dictator and trust games," TSE Working Papers 16-718, Toulouse School of Economics (TSE).
    6. Cardella, Eric & Roomets, Alex, 2022. "Pay distribution preferences and productivity effects: An experiment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 96(C).
    7. Bilal El Rafhi & Alexandre Volle, 2019. "The Effect of the Arab Spring on the Preferences for Redistribution in Egypt," Post-Print hal-02101392, HAL.
    8. Fisman, Raymond & Jakiela, Pamela & Kariv, Shachar, 2017. "Distributional preferences and political behavior," Journal of Public Economics, Elsevier, vol. 155(C), pages 1-10.
    9. Jan (J.P.M.) Heufer & Jason Shachat & Yan Xu, 2018. "Measuring tastes for equity and aggregate wealth behind the veil of ignorance," Tinbergen Institute Discussion Papers 18-087/I, Tinbergen Institute.
    10. Christine L. Exley & Judd B. Kessler, 2018. "Equity Concerns are Narrowly Framed," NBER Working Papers 25326, National Bureau of Economic Research, Inc.

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    More about this item

    Keywords

    Equality-efficiency tradeoff; Social planner; Social welfare preferences;
    All these keywords.

    JEL classification:

    • D3 - Microeconomics - - Distribution

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