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Rewarding effort

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  • Alexander Cappelen
  • Bertil Tungodden

Abstract

According to liberal egalitarian ethics, individuals should be rewarded for factors under their control, but not for factors outside their control. A fundamental challenge to liberal egalitarian theories of justice is how to do this without violating minimal egalitarian and liberal requirements. The paper analyses the effects of two such requirements: the principle of equal reward and the principle of reward independence. The exact formulations of these principles depend on how we interpret the concept of reward. We propose two different definitions of reward, contrafactual and interpersonal reward, where both can be given a general and narrow interpretation. Given this, we show that it is impossible to establish a framework that is truly liberal egalitarian in all respects and that a generalized version of the egalitarian equivalent mechanism is the most plausible liberal egalitarian approach.
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Suggested Citation

  • Alexander Cappelen & Bertil Tungodden, 2009. "Rewarding effort," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 39(3), pages 425-441, June.
    • Handle: RePEc:spr:joecth:v:39:y:2009:i:3:p:425-441
    DOI: 10.1007/s00199-007-0320-x
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    • Cappelen, Alexander W. & Tungodden, Bertil, 2004. "Rewarding effort," Memorandum 15/2004, Oslo University, Department of Economics.

    References listed on IDEAS

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    3. Cappelen, Alexander W. & Tungodden, Bertil, 2006. "A Liberal Egalitarian Paradox," Economics and Philosophy, Cambridge University Press, vol. 22(3), pages 393-408, November.
    4. Iturbe-Ormaetxe, Inigo & Nieto, Jorge, 1996. "On Fair Allocations and Monetary Compensations," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 7(1), pages 125-138, January.
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    7. Alexander W. Cappelen & Bertil Tungodden, 2003. "Reward and Responsibility: How Should We be Affected when Others Change their Effort?," Politics, Philosophy & Economics, , vol. 2(2), pages 191-211, June.
    8. Alexander W. Cappelen & Astri Drange Hole & Erik Ø Sørensen & Bertil Tungodden, 2007. "The Pluralism of Fairness Ideals: An Experimental Approach," American Economic Review, American Economic Association, vol. 97(3), pages 818-827, June.
    9. Roemer, J.E., 1992. "A Pragmatic Theory of Responsibility for the Egalitarian Planner," Papers 391, California Davis - Institute of Governmental Affairs.
    10. Alexander W. Cappelen & Bertil Tungodden, 2002. "Responsibility and Reward," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 59(1), pages 120-140, February.
    11. Bertil Tungodden, 2005. "Responsibility and redistribution: The case of first best taxation," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 24(1), pages 33-44, June.
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    Citations

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    Cited by:

    1. Ismael Rodriguez-Lara & Luis Moreno-Garrido, 2012. "Modeling Inequity Aversion in a Dictator Game with Production," Games, MDPI, vol. 3(4), pages 1-12, October.
    2. Alexander Cappelen & Bertil Tungodden, 2011. "Distributive interdependencies in liberal egalitarianism," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 36(1), pages 35-47, January.
    3. Olof Johansson-Stenman & James Konow, 2010. "Fair Air: Distributive Justice and Environmental Economics," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 46(2), pages 147-166, June.
    4. Alice Becker, 2013. "Accountability and the fairness bias: the effects of effort vs. luck," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 41(3), pages 685-699, September.
    5. Weinreich, Daniel, 2013. "Fair tax evasion and majority voting over redistributive taxation," MPRA Paper 48919, University Library of Munich, Germany.

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    More about this item

    Keywords

    Liberal egalitarianism; Responsibility; Equalization; Egalitarian equivalent mechanism; D63; D71;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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