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A Matter of Perspective: How Experience Shapes Preferences for Redistribution

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  • Lea Cassar
  • Arnd H. Klein

Abstract

We investigate in a laboratory experiment if the experience of economic failure or success shapes people’s preferences for redistribution beyond self-interest. Subjects generated a high or a low income either through a lottery or through an effort-based tournament. A sub-set of subjects could then redistribute the income of another sub-set of subjects. We find that individuals who lost the tournament (lottery) redistribute significantly more than all the other types of distributors when the inequality is generated by the tournament (lottery). The effect still holds when controlling for self-selection into different outcomes of the tournament and can be explained by in- or out-group bias and a self-serving bias in responsibility attribution. These findings have implications for public policies and for the design of compensation schemes in organizations.

Suggested Citation

  • Lea Cassar & Arnd H. Klein, 2017. "A Matter of Perspective: How Experience Shapes Preferences for Redistribution," CESifo Working Paper Series 6302, CESifo.
    • Handle: RePEc:ces:ceswps:_6302
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    References listed on IDEAS

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    Cited by:

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    2. G. Andersen, Asbjørn & Franklin, Simon & Getahun, Tigabu & Kotsadam, Andreas & Somville, Vincent & Villanger, Espen, 2023. "Does wealth reduce support for redistribution? Evidence from an Ethiopian housing lottery," Journal of Public Economics, Elsevier, vol. 224(C).
    3. Stefania Bortolotti & Ivan Soraperra & Matthias Sutter & Claudia Zoller, 2017. "Too Lucky to be True - Fairness Views under the Shadow of Cheating," CESifo Working Paper Series 6563, CESifo.
    4. Cherry, Todd L. & James, Alexander G. & Murphy, James, 2021. "The impact of public health messaging and personal experience on the acceptance of mask wearing during the COVID-19 pandemic," Journal of Economic Behavior & Organization, Elsevier, vol. 187(C), pages 415-430.

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    More about this item

    Keywords

    distributive justice; experience; failure; in-group bias; self-serving bias;
    All these keywords.

    JEL classification:

    • 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
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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