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Abstract

We perform an experiment which provides a laboratory replica of some important features of the welfare state. In the experiment, all individuals in a group decide whether to make a costly effort, which produces a random (independent) outcome for each one of them. The group members then vote on whether to redistribute the resulting and commonly known total sum of earnings equally amongst themselves. This game has two equilibria, if played once. In one of them, all players make effort and there is little redistribution. In the other one, there is no effort and nothing

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File URL: http://hdl.handle.net/10.1007/s10683-011-9300-x
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Bibliographic Info

Article provided by Springer in its journal Experimental Economics.

Volume (Year): 15 (2012)
Issue (Month): 2 (June)
Pages: 278-308

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Handle: RePEc:kap:expeco:v:15:y:2012:i:2:p:278-308

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Web page: http://www.springerlink.com/link.asp?id=102888

Related research

Keywords: Redistribution; Political equilibrium; Voting; Multiple equilibria; Experiments; C72; C92; D72; E24; H24; I31; O38;

Other versions of this item:

Find related papers by JEL classification:

• C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
• C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
• D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
• E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
• H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
• I31 - Health, Education, and Welfare - - Welfare and Poverty - - - General Welfare
• O - Economic Development, Technological Change, and Growth

References

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Cited by:

1. Claudia M. Buch & Christoph Engel, 2012. "The Tradeoff between Redistribution and effort: Evidence from the Field and from the Lab," IAW Discussion Papers 81, Institut für Angewandte Wirtschaftsforschung (IAW).
   
   • Claudia M. Buch & Christoph Engel, 2012. "The Tradeoff Between Redistribution and Effort: Evidence from the Field and from the Lab," CESifo Working Paper Series 3808, CESifo Group Munich.
2. Claudia M. Buch & Christoph Engel, 2012. "Effort and Redistribution: Better Cousins Than One Might Have Thought," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2012_10, Max Planck Institute for Research on Collective Goods, revised Mar 2013.

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