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Rewarding effort

  • Cappelen, Alexander W.


    (Dept. of Economics, University of Oslo)

  • Tungodden, Bertil


    (Norwegian School of Economics and Business Administration)

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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Paper provided by Oslo University, Department of Economics in its series Memorandum with number 15/2004.

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Length: 29 pages
Date of creation: 27 Oct 2004
Date of revision:
Handle: RePEc:hhs:osloec:2004_015
Contact details of provider: Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
Phone: 22 85 51 27
Fax: 22 85 50 35
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  1. Moulin, Herve, 1994. "Social choice," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 2, chapter 31, pages 1091-1125 Elsevier.
  2. Marc Fleurbaey & Francois Maniquet, 1999. "Cooperative production with unequal skills: The solidarity approach to compensation," Social Choice and Welfare, Springer, vol. 16(4), pages 569-583.
  3. 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.
  4. Cappelen, Alexander W. & Tungodden, Bertil, 2006. "A Liberal Egalitarian Paradox," Economics and Philosophy, Cambridge University Press, vol. 22(03), pages 393-408, November.
  5. Fleurbaey, Marc, 1995. "Equal Opportunity or Equal Social Outcome?," Economics and Philosophy, Cambridge University Press, vol. 11(01), pages 25-55, April.
  6. Bertil Tungodden, 2005. "Responsibility and redistribution: The case of first best taxation," Social Choice and Welfare, Springer, vol. 24(1), pages 33-44, 06.
  7. Bossert, W., 1993. "Redistribution Mechanisms Based on Individual Characteristics," Working Papers 9307, University of Waterloo, Department of Economics.
  8. Jorge Nieto & IÓigo Iturbe-Ormaetxe, 1995. "On fair allocations and monetary compensations," Economic Theory, Springer, vol. 7(1), pages 125-138.
  9. Marc Fleurbaey & Walter Bossert, 1996. "Redistribution and compensation (*)," Social Choice and Welfare, Springer, vol. 13(3), pages 343-355.
  10. 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.
  11. Fleurbaey, Marc, 1995. "Equality and responsibility," European Economic Review, Elsevier, vol. 39(3-4), pages 683-689, April.
  12. Alexander W. Cappelen & Bertil Tungodden, 2002. "Responsibility and Reward," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 59(1), pages 120-, February.
  13. Roemer, J.E., 1992. "A Pragmatic Theory of Responsibility for the Egalitarian Planner," Papers 391, California Davis - Institute of Governmental Affairs.
  14. Fleurbaey Marc, 1995. "Three Solutions for the Compensation Problem," Journal of Economic Theory, Elsevier, vol. 65(2), pages 505-521, April.
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