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Fairness in winner-take-all competitions

Author

Listed:
  • Björn Bartling
  • Alexander W. Cappelen
  • Mathias Ekström
  • Erik Ø. Sørensen
  • Bertil Tungodden

Abstract

This paper reports the results of a large-scale incentivized experiment investigating individuals’ fairness perceptions of the extreme income inequalities generated in winner-take-all competitions. We find that extreme income inequality in winner-take-all competitions is commonly accepted in our sample of 4,000 participants from the general population of the U.S., even when the winner outperforms the runner-up by the smallest possible margin. Generally, fairness judgements are only weakly influenced by the winning margin, which reveals that the mere fact of winning — be it by a tiny margin or by a substantial gap — justifies resulting inequalities. Our results improve understanding of public attitudes toward fairness and redistributive policies in winner-take-all competitions marked by extreme income inequalities.

Suggested Citation

  • Björn Bartling & Alexander W. Cappelen & Mathias Ekström & Erik Ø. Sørensen & Bertil Tungodden, 2018. "Fairness in winner-take-all competitions," ECON - Working Papers 287, Department of Economics - University of Zurich, revised Aug 2024.
    • Handle: RePEc:zur:econwp:287
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    File URL: https://www.zora.uzh.ch/id/eprint/151317/7/econwp287.pdf
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    References listed on IDEAS

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    2. Dong, Zhiqiang & Zhang, Yanren, 2022. "Tournaments as coordination devices: Theory and experimental evidence," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 100(C).
    3. Fehr, Dietmar & Rau, Hannes & Trautmann, Stefan T. & Xu, Yilong, 2020. "Inequality, fairness and social capital," European Economic Review, Elsevier, vol. 129(C).
    4. Alexander W Cappelen & Johanna Mollerstrom & Bjørn-Atle Reme & Bertil Tungodden, 2022. "A Meritocratic Origin of Egalitarian Behaviour," The Economic Journal, Royal Economic Society, vol. 132(646), pages 2101-2117.
    5. Tobias König & Dorothea Kübler & Lydia Mechtenberg & Renke Schmacker, 2023. "Fairness in Matching Markets: Experimental Evidence," Rationality and Competition Discussion Paper Series 442, CRC TRR 190 Rationality and Competition.
    6. Peter Andre, 2021. "Shallow Meritocracy: An Experiment on Fairness Views," ECONtribute Discussion Papers Series 115, University of Bonn and University of Cologne, Germany.
    7. Granaglia, Elena, 2019. "Can market inequalities be justified? The intrinsic shortcomings of meritocracy," Structural Change and Economic Dynamics, Elsevier, vol. 51(C), pages 284-290.

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    More about this item

    Keywords

    Winner-take-all competitions; winning margin; merit; fairness; income inequality; redistributive policies;
    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

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