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Fair Institutions

Author

Listed:
  • Wang, Weijia

    (Dept. of Economics, Norwegian School of Economics and Business Administration)

  • Valasek, Justin

    (Dept. of Economics, Norwegian School of Economics and Business Administration)

Abstract

The experimental literature on preferences for redistribution has established that individual perceptions of what earning distributions are fair depend greatly on context. In this paper, we study an important and novel dimension of context: whether the choice to redistribute occurs before workers work and accrue earnings, or after. Contrary to the predictions of our theoretical framework, we fi nd no evidence that spectators are less likely to equalize earnings ex ante than to equalize earnings ex post. Interestingly, our study also suggests that, relative to American subjects, Scandinavian subjects are more likely to equalize ex post earnings, but we find no evidence that Scandinavian and American subjects make different choices ex ante. A follow-up analysis suggests that the latter result is largely due to Scandinavian and American subjects having similar preferences over ex ante redistribution when equalizing earnings comes at a cost to efficiency. Overall, our results suggest that context-dependent preferences for redistribution are sensitive to the relative timing of the redistribution choice.

Suggested Citation

  • Wang, Weijia & Valasek, Justin, 2025. "Fair Institutions," Discussion Paper Series in Economics 8/2025, Norwegian School of Economics, Department of Economics.
  • Handle: RePEc:hhs:nhheco:2025_008
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    More about this item

    Keywords

    Inequality; Fairness; Institutions; Experiment;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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