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Equality preference in the claims problem: a questionnaire study of cuts in earnings and pensions

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  • BOSMANS, Kristof
  • SCHOKKAERT, Erik

Abstract

Many distributional conflicts are characterized by the presence of acquired rights. The basic structure of these conflicts is that of the so-called claims problem, in which an amount of money has to be divided among individuals with differing claims and the total amount available falls short of the sum of the claims. We describe the results of a questionnaire in which Belgian and German students were confronted with nine claims problems. In the "Firm" version, respondents had to divide revenue among the owners of a firm who contribute to the activities of the firm in different degrees. In the "Pensions" version, they had to divide tax money among pensioners who have paid different contributions during their active career. Responses in the Pensions version were more egalitarian than in the Firm version. For both versions, the proportional rule performs very well in describing the choices of the respondents. Other prominent rules in particular the constrained equal awards and constrained equal losses rules fail to capture some basic intuitions. A substantial part of the respondents tend to become more progressive as the amount to be distributed decreases other things equal, and tend to become more progressive as the inequality in the distribution of claims becomes more unequal other things equal. All of these conclusions are robust with respect to the difference in home-country of the respondents.

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Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers RP with number -2166.

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Handle: RePEc:cor:louvrp:-2166

Note: In : Social Choice and Welfare, 33, 533-557, 2009
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  1. HERRERO, Carmen & MORENO-TERNERO, Juan D. & PONTI, Giovanni, . "On the adjudication of conflicting claims: an experimental study," CORE Discussion Papers RP, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) -2264, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  2. Biung-Ghi Ju & Juan Moreno-Ternero, 2008. "On the equivalence between progressive taxation and inequality reduction," Social Choice and Welfare, Springer, Springer, vol. 30(4), pages 561-569, May.
  3. Young, H. P., 1988. "Distributive justice in taxation," Journal of Economic Theory, Elsevier, Elsevier, vol. 44(2), pages 321-335, April.
  4. Lars Peter Østerdal & Jens Leth Hougaard, 2004. "Inequality Preserving Rationing," Discussion Papers 04-23, University of Copenhagen. Department of Economics.
  5. Tito Boeri & Axel Boersch-Supan & Guido Tabellini, 2002. "Pension Reforms and the Opinions of European Citizens," American Economic Review, American Economic Association, American Economic Association, vol. 92(2), pages 396-401, May.
  6. Juan de Dios Moreno Ternero & Antonio Villar Notario, 2003. "The Talmud Rule And The Securement Of Agents? Awards," Working Papers. Serie AD, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) 2003-05, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  7. Tito Boeri & Axel Börsch-Supan & Guido Tabellini, 2001. "Would you like to shrink the welfare state? A survey of European citizens," Economic Policy, CEPR;CES;MSH, CEPR;CES;MSH, vol. 16(32), pages 7-50, 04.
  8. William Thomson, 2012. "Lorenz rankings of rules for the adjudication of conflicting claims," Economic Theory, Springer, Springer, vol. 50(3), pages 547-569, August.
  9. Kristof Bosmans & Luc Lauwers, 2011. "Lorenz comparisons of nine rules for the adjudication of conflicting claims," International Journal of Game Theory, Springer, Springer, vol. 40(4), pages 791-807, November.
  10. Moulin, Herve, 2002. "Axiomatic cost and surplus sharing," Handbook of Social Choice and Welfare, Elsevier, in: K. J. Arrow & A. K. Sen & K. Suzumura (ed.), Handbook of Social Choice and Welfare, edition 1, volume 1, chapter 6, pages 289-357 Elsevier.
  11. MORENO-TERNERO, Juan D. & VILLAR, Antonio, . "On the relative equitability of a family of taxation rules," CORE Discussion Papers RP, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) -1899, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  12. Youngsub Chun & William Thomson, 2004. "Convergence under Replication of Rules to Adjudicate Conflicting Claims," RCER Working Papers 512, University of Rochester - Center for Economic Research (RCER).
  13. Aumann, Robert J. & Maschler, Michael, 1985. "Game theoretic analysis of a bankruptcy problem from the Talmud," Journal of Economic Theory, Elsevier, Elsevier, vol. 36(2), pages 195-213, August.
  14. Erik Schokkaert, 1999. "M. Tout-le-monde est "post-welfariste". Opinions sur la justice redistributive," Revue Économique, Programme National Persée, vol. 50(4), pages 811-831.
  15. Diego Dominguez & William Thomson, 2006. "A new solution to the problem of adjudicating conflicting claims," Economic Theory, Springer, Springer, vol. 28(2), pages 283-307, 06.
  16. Sen, Amartya, 1997. "On Economic Inequality," OUP Catalogue, Oxford University Press, Oxford University Press, number 9780198292975, October.
  17. José Alcalde & María Marco & José Silva, 2008. "The minimal overlap rule revisited," Social Choice and Welfare, Springer, Springer, vol. 31(1), pages 109-128, June.
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Citations

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Cited by:
  1. Jeremiah Hurley & Neil Buckley & Katherine Cuff & Mita Giacomini & David Cameron, 2011. "Judgments regarding the fair division of goods: the impact of verbal versus quantitative descriptions of alternative divisions," Social Choice and Welfare, Springer, Springer, vol. 37(2), pages 341-372, July.
  2. Carmen Herrero & Juan D. Moreno-Ternero & Giovanni Ponti, 2009. "On the Adjudication of Conflicting Claims: An Experimental Study," Working Papers, Universidad de Málaga, Department of Economic Theory, Málaga Economic Theory Research Center 2009-5, Universidad de Málaga, Department of Economic Theory, Málaga Economic Theory Research Center.
  3. Corazzini, Luca & Esposito, Lucio & Majorano, Francesca, 2011. "Exploring the absolutist vs relativist perception of poverty using a cross-country questionnaire survey," Journal of Economic Psychology, Elsevier, Elsevier, vol. 32(2), pages 273-283, March.
  4. Franziska Tausch & Jan Potters & Arno Riedl, 2010. "Preferences for Redistribution and Pensions. What can we Learn from Experiments?," CESifo Working Paper Series 3156, CESifo Group Munich.
  5. Ansink, Erik, 2011. "The Arctic scramble: Introducing claims in a contest model," European Journal of Political Economy, Elsevier, vol. 27(4), pages 693-707.
  6. Kristof Bosmans & Luc Lauwers, 2007. "Lorenz comparisons of nine rules for the adjudication of conflicting claims," Center for Economic Studies - Discussion papers, Katholieke Universiteit Leuven, Centrum voor Economische Studiën ces0705, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
  7. Erik Ansink & Carmen Marchiori, 2009. "Reallocating Water: An Application of Sequent," Working Papers, Fondazione Eni Enrico Mattei 2009.126, Fondazione Eni Enrico Mattei.
  8. Irlenbusch, Bernd & Hennig-Schmidt, Heike & Rilke, Rainer & Walkowitz, Gari, 2013. "Self-Serving Use of Equity Rules in Bargaining with Asymmetric Outside Options," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79975, Verein für Socialpolitik / German Economic Association.
  9. Corazzini, Luca & Esposito, Lucio & Majorano, Francesca, 2012. "Reign in hell or serve in heaven? A cross-country journey into the relative vs absolute perceptions of wellbeing," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 81(3), pages 715-730.
  10. William Thomson, 2013. "Axiomatic and game-theoretic analysis of bankruptcy and taxation problems: an update," RCER Working Papers 578, University of Rochester - Center for Economic Research (RCER).

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