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Last word not yet spoken: a reinvestigation of last place aversion with aversion to rank reversals

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  • Andrea F. M. Martinangeli

    (Max Planck Institute for Tax Law and Public Finance)

  • Lisa Windsteiger

    (Max Planck Institute for Tax Law and Public Finance)

Abstract

Preferences over social ranks have emerged as potential drivers of weaker than expected support for redistributive interventions among those closest to the bottom of the income distribution. We compare preferences for alterations of the income distribution affecting the decision maker’s social rank, but not their income, and compare them with similar alterations leaving both rank and income unchanged. Our study fails to find evidence of last-place aversion in a replication of Kuziemko et al. (Q J Econ 129(1):105–149, 2014). However, using a modified design that holds ranks fixed across rounds we find support for both a discontinuously greater disutility from occupying the last as opposed to higher ranks, thus affecting only those closest to the bottom of the distribution, and for a general dislike of rank reversals affecting most ranks. We discuss implications for policy design in both public finance and management science.

Suggested Citation

  • Andrea F. M. Martinangeli & Lisa Windsteiger, 2021. "Last word not yet spoken: a reinvestigation of last place aversion with aversion to rank reversals," Experimental Economics, Springer;Economic Science Association, vol. 24(3), pages 800-820, September.
    • Handle: RePEc:kap:expeco:v:24:y:2021:i:3:d:10.1007_s10683-020-09682-8
    DOI: 10.1007/s10683-020-09682-8
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    References listed on IDEAS

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    Cited by:

    1. Xiaogeng Xu & Satu Metsälampi & Michael Kirchler & Kaisa Kotakorpi & Peter Hans Matthews & Topi Miettinen, 2023. "Which income comparisons matter to people, and how? Evidence from a large field experiment," Working Papers 10, Finnish Centre of Excellence in Tax Systems Research.
    2. Xiaogeng Xu & Satu Metsälampi & Michael Kirchler & Kaisa Kotakorpi & Peter Hans Matthews & Topi Miettinen, 2023. "Which income comparisons matter to people, and how? Evidence from a large field experiment," Working Papers 2023-05, Faculty of Economics and Statistics, Universität Innsbruck.
    3. Martinangeli, Andrea F.M. & Windsteiger, Lisa, 2023. "Immigration vs. poverty: Causal impact on demand for redistribution in a survey experiment," European Journal of Political Economy, Elsevier, vol. 78(C).
    4. Christopher L. Brown & Timothy N. Cason, 2024. "Local Inequality and Own Rank Preferences," Purdue University Economics Working Papers 1340, Purdue University, Department of Economics.

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    More about this item

    Keywords

    Income distribution; Last place aversion; Positional concerns; Preferences for redistribution; Rank reversal aversion;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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    1. Last word not yet spoken: a reinvestigation of last place aversion with aversion to rank reversals (Experimental Economics 2021) in ReplicationWiki

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