IDEAS home Printed from https://ideas.repec.org/p/hal/wpaper/halshs-01863359.html
   My bibliography  Save this paper

In search of unanimously preferred income distributions. Evidence from a choice experiment

Author

Listed:
  • Sophie Cetre

    (Sciences Po - Sciences Po)

  • Max Lobeck

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Claudia Senik

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, UP4 - Université Paris-Sorbonne)

  • Thierry Verdier

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)

Abstract

Using a choice-experiment in the lab, we look at preferences over pairs of income distributions within small groups in a firm-like setting. Is one type of distribution capable of attracting votes unanimously? It turns out that Pareto-dominance is the most important choice criterion: in binary choices over two distributions, all subjects prefer larger inequality when it makes everyone weakly better off. This is true,no matter whether income distribution is based on merit or luck. Unanimity only breaks once subjects' positions within the income distribution are fixed and known ex-ante. However, even then, 75% subjects prefer Pareto-dominant distributions. This suggests that efficiency motives are of primary importance, more so than the origin of inequality.

Suggested Citation

  • Sophie Cetre & Max Lobeck & Claudia Senik & Thierry Verdier, 2018. "In search of unanimously preferred income distributions. Evidence from a choice experiment," Working Papers halshs-01863359, HAL.
    • Handle: RePEc:hal:wpaper:halshs-01863359
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01863359
    as

    Download full text from publisher

    File URL: https://shs.hal.science/halshs-01863359/document
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Hoffman Elizabeth & McCabe Kevin & Shachat Keith & Smith Vernon, 1994. "Preferences, Property Rights, and Anonymity in Bargaining Games," Games and Economic Behavior, Elsevier, vol. 7(3), pages 346-380, November.
    2. Catherine C. Eckel & Philip J. Grossman, 2002. "Sex Differences and Statistical Stereotyping in Attitudes Toward Financial Risk," Monash Economics Working Papers archive-03, Monash University, Department of Economics.
    3. Alberto Alesina & George-Marios Angeletos, 2005. "Fairness and Redistribution," American Economic Review, American Economic Association, vol. 95(4), pages 960-980, September.
    4. Todd L. Cherry & Peter Frykblom & Jason F. Shogren, 2002. "Hardnose the Dictator," American Economic Review, American Economic Association, vol. 92(4), pages 1218-1221, September.
    5. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory of Fairness, Competition, and Cooperation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(3), pages 817-868.
    6. David Bjerk, 2016. "In front of and behind the veil of ignorance: an analysis of motivations for redistribution," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 47(4), pages 791-824, December.
    7. Dirk Engelmann & Martin Strobel, 2004. "Inequality Aversion, Efficiency, and Maximin Preferences in Simple Distribution Experiments," American Economic Review, American Economic Association, vol. 94(4), pages 857-869, September.
    8. Ruben Durante & Louis Putterman & Joël Weele, 2014. "Preferences For Redistribution And Perception Of Fairness: An Experimental Study," Journal of the European Economic Association, European Economic Association, vol. 12(4), pages 1059-1086, August.
    9. Gary Charness & Matthew Rabin, 2002. "Understanding Social Preferences with Simple Tests," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(3), pages 817-869.
    10. Alesina, Alberto & La Ferrara, Eliana, 2005. "Preferences for redistribution in the land of opportunities," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 897-931, June.
    11. Fong, Christina, 2001. "Social preferences, self-interest, and the demand for redistribution," Journal of Public Economics, Elsevier, vol. 82(2), pages 225-246, November.
    12. Ruben Durante & Louis Putterman & Joël Weele, 2014. "Preferences For Redistribution And Perception Of Fairness: An Experimental Study," Journal of the European Economic Association, European Economic Association, vol. 12(4), pages 1059-1086, August.
    13. Oxoby, Robert J. & Spraggon, John, 2008. "Mine and yours: Property rights in dictator games," Journal of Economic Behavior & Organization, Elsevier, vol. 65(3-4), pages 703-713, March.
    14. Philip A. Michelbach & John T. Scott & Richard E. Matland & Brian H. Bornstein, 2003. "Doing Rawls Justice: An Experimental Study of Income Distribution Norms," American Journal of Political Science, John Wiley & Sons, vol. 47(3), pages 523-539, July.
    15. John C. Harsanyi, 1953. "Cardinal Utility in Welfare Economics and in the Theory of Risk-taking," Journal of Political Economy, University of Chicago Press, vol. 61(5), pages 434-434.
    16. 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.
    17. Kritikos, Alexander & Bolle, Friedel, 2001. "Distributional concerns: equity- or efficiency-oriented?," Economics Letters, Elsevier, vol. 73(3), pages 333-338, December.
    18. James Konow, 2003. "Which Is the Fairest One of All? A Positive Analysis of Justice Theories," Journal of Economic Literature, American Economic Association, vol. 41(4), pages 1188-1239, December.
    19. Frohlich, Norman & Oppenheimer, Joe A. & Eavey, Cheryl L., 1987. "Laboratory Results on Rawls's Distributive Justice," British Journal of Political Science, Cambridge University Press, vol. 17(1), pages 1-21, January.
    20. Steven R. Beckman & Buhong Zheng & John P. Formby & W. James Smith, 2002. "Envy, malice and Pareto efficiency: An experimental examination," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 19(2), pages 349-367.
    21. Olof Johansson-Stenman & Fredrik Carlsson & Dinky Daruvala, 2002. "Measuring Future Grandparents" Preferences for Equality and Relative Standing," Economic Journal, Royal Economic Society, vol. 112(479), pages 362-383, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cetre, Sophie & Lobeck, Max & Senik, Claudia & Verdier, Thierry, 2019. "Preferences over income distribution: Evidence from a choice experiment," Journal of Economic Psychology, Elsevier, vol. 74(C).
    2. Cardella, Eric & Roomets, Alex, 2022. "Pay distribution preferences and productivity effects: An experiment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 96(C).
    3. Michele Bernasconi & Enrico Longo & Valeria Maggian, 2023. "When merit breeds luck (or not): an experimental study on distributive justice," Working Papers 2023:02, Department of Economics, University of Venice "Ca' Foscari".
    4. Akbaş, Merve & Ariely, Dan & Yuksel, Sevgi, 2019. "When is inequality fair? An experiment on the effect of procedural justice and agency," Journal of Economic Behavior & Organization, Elsevier, vol. 161(C), pages 114-127.
    5. Grimalday, Gianluca & Karz, Anirban & Proto, Eugenio, 2012. "Everyone Wants a Chance: Initial Positions and Fairness in Ultimatum Games," CAGE Online Working Paper Series 93, Competitive Advantage in the Global Economy (CAGE).
    6. Xu, Zhicheng & Palma, Marco A., 2015. "To buy or not buy (insurance)? An experiment on public funds distribution under different rooted risks," 2015 Annual Meeting, January 31-February 3, 2015, Atlanta, Georgia 196649, Southern Agricultural Economics Association.
    7. Ku, Hyejin & Salmon, Timothy C., 2013. "Procedural fairness and the tolerance for income inequality," European Economic Review, Elsevier, vol. 64(C), pages 111-128.
    8. Tyran, Jean-Robert & Sausgruber, Rupert, 2006. "A little fairness may induce a lot of redistribution in democracy," European Economic Review, Elsevier, vol. 50(2), pages 469-485, February.
    9. Schwaiger, Rene & Huber, Jürgen & Kirchler, Michael & Kleinlercher, Daniel & Weitzel, Utz, 2022. "Unequal opportunities, social groups, and redistribution: Evidence from Germany," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 100(C).
    10. Marcelo Bérgolo & Gabriel Burdín & Santiago Burone & Mauricio de Rosa & Matías Giaccobasso & Martín Leites, 2020. "Dissecting Inequality-Averse Preferences," Documentos de Trabajo (working papers) 20-19, Instituto de Economía - IECON.
    11. Gerald Eisenkopf, 2018. "Unequal Incentives and Perceived Fairness in Groups," Games, MDPI, vol. 9(3), pages 1-18, September.
    12. Kittel, Bernhard & Kanitsar, Georg & Traub, Stefan, 2017. "Knowledge, power, and self-interest," Journal of Public Economics, Elsevier, vol. 150(C), pages 39-52.
    13. Gustavo Caballero, "undated". "Information Effect Regarding Inequality of Opportunities on Redistribution: A Lab Experiment," Working Papers 2014-75, Department of Economics, University of Calgary, revised 15 Oct 2014.
    14. Sergio Beraldo & Massimiliano Piacenza & Gilberto Turati, 2014. "«Must Reward Hard Work»? An Experiment on Personal Responsibility and Preferences for Redistribution," CSEF Working Papers 377, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    15. Bérgolo, Marcelo & Burdin, Gabriel & Burone, Santiago & De Rosa, Mauricio & Giaccobasso, Matias & Leites, Martin, 2022. "Dissecting inequality-averse preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 782-802.
    16. Gilles Le Garrec, 2023. "Accounting for the long-term stability of the welfare-state regimes in a model with distributive preferences and social norms," Working Papers hal-03954024, HAL.
    17. Cabeza Martínez, Begoña, 2023. "Social preferences, support for redistribution, and attitudes towards vulnerable groups," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 107(C).
    18. Schildberg-Hörisch, Hannah, 2010. "Is the veil of ignorance only a concept about risk? An experiment," Journal of Public Economics, Elsevier, vol. 94(11-12), pages 1062-1066, December.
    19. Clark, Andrew E. & D'Ambrosio, Conchita, 2014. "Attitudes to Income Inequality: Experimental and Survey Evidence," IZA Discussion Papers 8136, Institute of Labor Economics (IZA).
    20. Rodriguez-Lara, Ismael, 2016. "Equity and bargaining power in ultimatum games," Journal of Economic Behavior & Organization, Elsevier, vol. 130(C), pages 144-165.

    More about this item

    Keywords

    Distributive preferences; Inequality; Choice experiment;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:wpaper:halshs-01863359. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.