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Just Luck: An Experimental Study of Risk-Taking and Fairness

Author Info

Listed author(s):
  • Alexander W. Cappelen
  • James Konow
  • Erik ?. S?rensen
  • Bertil Tungodden

Abstract

Choices involving risk significantly affect the distribution of income and wealth in society. This paper reports the results of the first experiment, to our knowledge, to study fairness views about risktaking, specifically whether such views are based chiefly on ex ante opportunities or on ex post outcomes. We find that, even though many participants focus exclusively on ex ante opportunities, most favor some redistribution ex post. Many participants also make a distinction between ex post inequalities that reflect differences in luck and ex post inequalities that reflect differences in choices. These findings apply to both stakeholders and impartial spectators.

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/aer.103.4.1398
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Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 103 (2013)
Issue (Month): 4 (June)
Pages: 1398-1413

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Handle: RePEc:aea:aecrev:v:103:y:2013:i:4:p:1398-1413
Note: DOI: 10.1257/aer.103.4.1398
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Find related papers by JEL classification:
  • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
  • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
  • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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