Just Luck: An Experimental Study of Risk-Taking and Fairness
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.
Volume (Year): 103 (2013)
Issue (Month): 4 (June)
|Contact details of provider:|| Web page: https://www.aeaweb.org/aer/|
More information through EDIRC
|Order Information:||Web: https://www.aeaweb.org/subscribe.html|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Vitezslav Babicky & Andreas Ortmann & Silvester Van Koten, 2010.
"Fairness in Risky Environments: Theory and Evidence,"
CERGE-EI Working Papers
wp419, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
- Silvester Van Koten & Andreas Ortmann & Vitezslav Babicky, 2013. "Fairness in Risky Environments: Theory and Evidence," Games, MDPI, Open Access Journal, vol. 4(2), pages 208-242, May.
- Vitezslav Babicky, 2003. "Fairness Under Risk: Insights from Dictator Games," CERGE-EI Working Papers wp217, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
- Geoffrey Brennan & Werner Güth & Luis G. Gonzalez & M. Vittoria Levati, 2005.
"Attitudes toward Private and Collective Risks in Individual and Strategic Choice Situations,"
Papers on Strategic Interaction
2005-22, Max Planck Institute of Economics, Strategic Interaction Group.
- Brennan, Geoffrey & González, Luis G. & Güth, Werner & Levati, M. Vittoria, 2008. "Attitudes toward private and collective risk in individual and strategic choice situations," Journal of Economic Behavior & Organization, Elsevier, vol. 67(1), pages 253-262, July.
- Donald W.K. Andrews, 1999.
"Testing When a Parameter Is on the Boundary of the Maintained Hypothesis,"
Cowles Foundation Discussion Papers
1229, Cowles Foundation for Research in Economics, Yale University.
- Andrews, Donald W K, 2001. "Testing When a Parameter Is on the Boundary of the Maintained Hypothesis," Econometrica, Econometric Society, vol. 69(3), pages 683-734, May.
- Fehr, Ernst & Schmidt, Klaus M., 1998.
"A Theory of Fairness, Competition and Cooperation,"
CEPR Discussion Papers
1812, C.E.P.R. Discussion Papers.
- Fehr, Ernst & Schmidt, Klaus M., . "A theory of fairness, competition, and cooperation," Chapters in Economics, University of Munich, Department of Economics.
- Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory of Fairness, Competition, and Cooperation," The Quarterly Journal of Economics, Oxford University Press, vol. 114(3), pages 817-868.
- Fehr, Ernst & Schmidt, Klaus M., 1999. "A theory of fairness, competition, and cooperation," Munich Reprints in Economics 20650, University of Munich, Department of Economics.
- Ernst Fehr & Klaus M. Schmidt, . "A Theory of Fairness, Competition and Cooperation," IEW - Working Papers 004, Institute for Empirical Research in Economics - University of Zurich.
- Gary Charness & Matthew Rabin, 2002. "Understanding Social Preferences with Simple Tests," The Quarterly Journal of Economics, Oxford University Press, vol. 117(3), pages 817-869.
- repec:adr:anecst:y:2001:i:63-64:p:04 is not listed on IDEAS
- Christopher Ferrall, 2005. "Solving Finite Mixture Models: Efficient Computation in Economics Under Serial and Parallel Execution," Computational Economics, Society for Computational Economics, vol. 25(4), pages 343-379, June.
- Charness, Gary B & Rabin, Matthew, 2001.
"Understanding Social Preferences With Simple Tests,"
University of California at Santa Barbara, Economics Working Paper Series
qt0dc3k4m5, Department of Economics, UC Santa Barbara.
- Gary Charness & Matthew Rabin, 2003. "Understanding Social Preferences with Simple Tests," General Economics and Teaching 0303002, EconWPA.
- Charness, Gary & Rabin, Matthew, 2001. "Understanding Social Preferences with Simple Tests," Department of Economics, Working Paper Series qt4qz9k8vg, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Charness, Gary & Rabin, Matthew, 2002. "Understanding Social Preferences with Simple Tests," Department of Economics, Working Paper Series qt3d04q5sm, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Marc Fleurbaey, 2007.
"Assessing Risky Social Situations,"
IDEP Working Papers
0703, Institut d'economie publique (IDEP), Marseille, France, revised Jan 2007.
- Marc Fleurbaey, 2009. "Assessing risky social situations," LSE Research Online Documents on Economics 27006, London School of Economics and Political Science, LSE Library.
- FLEURBAEY, Marc, . "Assessing risky social situations," CORE Discussion Papers RP 2289, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Brice Magdalou & Dimitri Dubois & Phu Nguyen-Van, 2009.
"Risk and Inequality Aversion in Social Dilemmas,"
09-02, LAMETA, Universtiy of Montpellier, revised Mar 2009.
- James Konow, 2000. "Fair Shares: Accountability and Cognitive Dissonance in Allocation Decisions," American Economic Review, American Economic Association, vol. 90(4), pages 1072-1091, September.
- Daniel John Zizzo, 2003. "Inequality and Procedural Fairness in a Money Burning and Stealing Experiment," Economics Series Working Papers 155, University of Oxford, Department of Economics.
- Todd L. Cherry & Peter Frykblom & Jason F. Shogren, 2002.
"Hardnose the Dictator,"
02-06, Department of Economics, Appalachian State University.
- Krawczyk, Michal, 2010. "A glimpse through the veil of ignorance: Equality of opportunity and support for redistribution," Journal of Public Economics, Elsevier, vol. 94(1-2), pages 131-141, February.
- Jason F. Shogren, 1990. "Experiment on Coasian Bargaining over Ex Ante Lotteries and Ex Post Rewards, An," Center for Agricultural and Rural Development (CARD) Publications 90-wp63, Center for Agricultural and Rural Development (CARD) at Iowa State University.
- Hammond, Peter J, 1981. "Ex-ante and Ex-post Welfare Optimality under Uncertainty," Economica, London School of Economics and Political Science, vol. 48(191), pages 235-50, August.
- Norman Frohlich & Joe Oppenheimer & Anja Kurki, 2004. "Modeling Other-Regarding Preferences and an Experimental Test," Public Choice, Springer, vol. 119(1_2), pages 91-117, 04.
- Zizzo, Daniel John, 2003. "Money burning and rank egalitarianism with random dictators," Economics Letters, Elsevier, vol. 81(2), pages 263-266, November.
- James Konow & Tatsuyoshi Saijo & Kenju Akai, 2008. "Morals and Mores? Experimental Evidence on Equity and Equality from the US and Japan," Levine's Working Paper Archive 122247000000002055, David K. Levine.
- 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.
- Alexander W. Cappelen & Astri D. Hole & Erik Ø. Sørensen & Bertil Tungodden, 2005. "The Pluralism of Fairness Ideals: An Experimental Approach," CESifo Working Paper Series 1611, CESifo Group Munich.
- Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March.
- John C. Harsanyi, 1955. "Cardinal Welfare, Individualistic Ethics, and Interpersonal Comparisons of Utility," Journal of Political Economy, University of Chicago Press, vol. 63, pages 309.
- Alon Harel & Zvi Safra & Uzi Segal, 2003. "Ex-Post Egalitarianism," Boston College Working Papers in Economics 563, Boston College Department of Economics.
- Ernst R. Berndt & Bronwyn H. Hall & Robert E. Hall & Jerry A. Hausman, 1974. "Estimation and Inference in Nonlinear Structural Models," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 3, number 4, pages 653-665 National Bureau of Economic Research, Inc.
- Konow, James, 2006.
"Is Fairness in the Eye of the Beholder? An Impartial Spectator Analysis of Justice,"
2730, University Library of Munich, Germany.
- James Konow, 2009. "Is fairness in the eye of the beholder? An impartial spectator analysis of justice," Social Choice and Welfare, Springer, vol. 33(1), pages 101-127, June.
- Alexander Cappelen & Astri Hole & Erik Sørensen & Bertil Tungodden, 2011. "The importance of moral reflection and self-reported data in a dictator game with production," Social Choice and Welfare, Springer, vol. 36(1), pages 105-120, January.
- Cappelen, Alexander W. & Tungodden, Bertil, 2006. "A Liberal Egalitarian Paradox," Economics and Philosophy, Cambridge University Press, vol. 22(03), pages 393-408, November.
- Zizzo, D.J. & Oswald, A., 2000. "Are People Willing to Pay to Reduce Others' Incomes?," The Warwick Economics Research Paper Series (TWERPS) 568, University of Warwick, Department of Economics.
This item is featured on the following reading lists or Wikipedia pages:
- Just Luck: An Experimental Study of Risk-Taking and Fairness (AER 2013) in ReplicationWiki
When requesting a correction, please mention this item's handle: RePEc:aea:aecrev:v:103:y:2013:i:4:p:1398-1413. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jane Voros)or (Michael P. Albert)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.