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Rewarding effort

Author

Listed:
  • Cappelen, Alexander W.

    (Dept. of Economics, University of Oslo)

  • Tungodden, Bertil

    (Norwegian School of Economics and Business Administration)

Abstract

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.

Suggested Citation

  • Cappelen, Alexander W. & Tungodden, Bertil, 2004. "Rewarding effort," Memorandum 15/2004, Oslo University, Department of Economics.
  • Handle: RePEc:hhs:osloec:2004_015
    as

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    File URL: http://www.sv.uio.no/econ/english/research/unpublished-works/working-papers/pdf-files/2004/Memo-15-2004.pdf
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    Other versions of this item:

    • Alexander Cappelen & Bertil Tungodden, 2009. "Rewarding effort," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 39(3), pages 425-441, June.

    References listed on IDEAS

    as
    1. Bossert W., 1996. "Redistribution mechanisms based on individual characteristics," Mathematical Social Sciences, Elsevier, vol. 31(1), pages 51-51, February.
    2. Maurice Salles, 2016. "Social choice," Chapters, in: Gilbert Faccarello & Heinz D. Kurz (ed.), Handbook on the History of Economic Analysis Volume III, chapter 36, pages 518-537, Edward Elgar Publishing.
    3. Cappelen, Alexander W. & Tungodden, Bertil, 2006. "A Liberal Egalitarian Paradox," Economics and Philosophy, Cambridge University Press, vol. 22(3), pages 393-408, November.
    4. Iturbe-Ormaetxe, Inigo & Nieto, Jorge, 1996. "On Fair Allocations and Monetary Compensations," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 7(1), pages 125-138, January.
    5. Marc Fleurbaey, 2012. "Three Solutions for the Compensation Problem," World Scientific Book Chapters, in: Equality of Opportunity The Economics of Responsibility, chapter 2, pages 33-51, World Scientific Publishing Co. Pte. Ltd..
    6. Barnett,William A. & Moulin,Hervé & Salles,Maurice & Schofield,Norman J. (ed.), 1995. "Social Choice, Welfare, and Ethics," Cambridge Books, Cambridge University Press, number 9780521443401.
    7. Alexander W. Cappelen & Bertil Tungodden, 2003. "Reward and Responsibility: How Should We be Affected when Others Change their Effort?," Politics, Philosophy & Economics, , vol. 2(2), pages 191-211, June.
    8. 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.
    9. Roemer, J.E., 1992. "A Pragmatic Theory of Responsibility for the Egalitarian Planner," Papers 391, California Davis - Institute of Governmental Affairs.
    10. Alexander W. Cappelen & Bertil Tungodden, 2002. "Responsibility and Reward," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 59(1), pages 120-140, February.
    11. Bertil Tungodden, 2005. "Responsibility and redistribution: The case of first best taxation," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 24(1), pages 33-44, June.
    12. Fleurbaey, Marc, 1995. "Equal Opportunity or Equal Social Outcome?," Economics and Philosophy, Cambridge University Press, vol. 11(1), pages 25-55, April.
    13. Marc Fleurbaey & Walter Bossert, 1996. "Redistribution and compensation (*)," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 13(3), pages 343-355.
    14. Marc Fleurbaey & Francois Maniquet, 1999. "Cooperative production with unequal skills: The solidarity approach to compensation," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 16(4), pages 569-583.
    15. 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.
    16. 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.
    17. Fleurbaey, Marc, 1995. "Equality and responsibility," European Economic Review, Elsevier, vol. 39(3-4), pages 683-689, April.
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    Citations

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    Cited by:

    1. Alexander Cappelen & Bertil Tungodden, 2011. "Distributive interdependencies in liberal egalitarianism," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 36(1), pages 35-47, January.
    2. Ismael Rodriguez-Lara & Luis Moreno-Garrido, 2012. "Modeling Inequity Aversion in a Dictator Game with Production," Games, MDPI, vol. 3(4), pages 1-12, October.
    3. Olof Johansson-Stenman & James Konow, 2010. "Fair Air: Distributive Justice and Environmental Economics," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 46(2), pages 147-166, June.
    4. Alice Becker, 2013. "Accountability and the fairness bias: the effects of effort vs. luck," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 41(3), pages 685-699, September.
    5. Weinreich, Daniel, 2013. "Fair tax evasion and majority voting over redistributive taxation," MPRA Paper 48919, University Library of Munich, Germany.

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    More about this item

    Keywords

    egalitarian; justice; reward;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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