"Should CEOs' Salaries Be Capped?" A Survey Experiment on Limitarian Preferences

This paper investigates preferences for limiting top incomes and wealth through a survey-based experiment with a large sample of participants (N = 3,954) from the US and Germany. Using a revealed preferences approach, we find that a significant majority (around 85%) of participants support income limits (have limitarian preferences). Importantly, we also find that a large share of these participants are driven by inequality aversion (weak limitarians), while a significant proportion of participants (around 30%) support limits irrespective of inequality (strong limitarians). Preferences for wealth caps are more polarized than for income caps, with higher shares of strong limitarians and those who oppose limits (non-limitarians). Notably, our participant classification predicts "real-world" voting behavior in a petition that required effort to sign. In terms of underlying motivations, strong limitarians exhibit less concern about the negative impacts of limits on economic efficiency, are less inclined to attribute top incomes and wealth to merit, are more supportive of government redistribution, and are more concerned about the effects of wealth concentration on corruption and the environment. These findings have important implications for economic theories of social preferences and can inform policy discussions around CEO compensation and wealth taxation.