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(Not) Everyone Can Be a Winner–The Role of Payoff Interdependence for Redistribution

Author

Listed:
  • Sebastian Schaube

    (Federal Ministry for Economic Affairs and Climate Action)

  • Louis Strang

    (University of Cologne)

Abstract

Frequently, one person’s success comes at the expense of others. We contrast such zero-sum environments in which individuals’ payoffs are interdependent to those where payoffs are independent. In a laboratory experiment, we study whether the resulting inequality is perceived differently and how this affects redistribution. Across treatments, we compare a spectator’s redistribution of two workers’ earnings. If workers do not compete in a zero-sum setting, average redistribution decreases. In a representative survey, we replicate this finding and document that individuals who believe in a zero-sum world support higher levels of redistribution and are more likely to be Democrats.

Suggested Citation

  • Sebastian Schaube & Louis Strang, 2022. "(Not) Everyone Can Be a Winner–The Role of Payoff Interdependence for Redistribution," ECONtribute Discussion Papers Series 160, University of Bonn and University of Cologne, Germany.
    • Handle: RePEc:ajk:ajkdps:160
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    File URL: https://www.econtribute.de/RePEc/ajk/ajkdps/ECONtribute_160_2022.pdf
    File Function: First version, 2022
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    Citations

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    Cited by:

    1. Timo Freyer & Laurenz R. K. Günther, 2022. "Inherited Inequality and the Dilemma of Meritocracy," ECONtribute Discussion Papers Series 171, University of Bonn and University of Cologne, Germany.

    More about this item

    Keywords

    Redistribution; Fairness; Zero-sum; Social preferences; Lab experiment;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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