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Through the Looking Glass: Transparency about Others' Luck and Effort Enhances Redistribution

Author

Listed:
  • Wiese, Juliane V.

    (Warwick Business School)

  • Powdthavee, Nattavudh

    (Nanyang Technological University, Singapore)

  • Yeo, Jonathan

    (Nanyang Technological University, Singapore)

  • Riyanto, Yohanes E.

    (Nanyang Technological University, Singapore)

Abstract

How do we persuade people to part with money they feel they have rightly earned? We conducted a dyadic experiment (N=1,986) where luck determined which of the players' performance counted toward winning the game. Despite luck playing a large part, we found strong evidence of justified deservingness among the winners. The better they performed in the task, the less they redistributed to their nonwinning partner. However, in treatments where performance was transparent, winners significantly increased redistribution to nonwinners who performed similarly well. We find that transparency can effectively alter redistributive preferences even when people feel fully deserving of their income.

Suggested Citation

  • Wiese, Juliane V. & Powdthavee, Nattavudh & Yeo, Jonathan & Riyanto, Yohanes E., 2023. "Through the Looking Glass: Transparency about Others' Luck and Effort Enhances Redistribution," IZA Discussion Papers 15909, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp15909
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    More about this item

    Keywords

    luck; efforts; survivalship bias; redistribution; inequality; deservingness;
    All these keywords.

    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • D9 - Microeconomics - - Micro-Based Behavioral Economics

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