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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.

Suggested Citation

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

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    • 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

    1. Bossert W., 1996. "Redistribution mechanisms based on individual characteristics," Mathematical Social Sciences, Elsevier, vol. 31(1), pages 51-51, February.
    2. Cappelen, Alexander W. & Tungodden, Bertil, 2006. "A Liberal Egalitarian Paradox," Economics and Philosophy, Cambridge University Press, vol. 22(03), pages 393-408, November.
    3. 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.
    4. Roemer, J.E., 1992. "A Pragmatic Theory of Responsibility for the Egalitarian Planner," Papers 391, California Davis - Institute of Governmental Affairs.
    5. Alexander W. Cappelen & Bertil Tungodden, 2002. "Responsibility and Reward," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 59(1), pages 120-120, February.
    6. 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.
    7. 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.
    8. Fleurbaey, Marc, 1995. "Equal Opportunity or Equal Social Outcome?," Economics and Philosophy, Cambridge University Press, vol. 11(01), pages 25-55, April.
    9. 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.
    10. 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.
    11. 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.
    12. 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.
    13. Fleurbaey Marc, 1995. "Three Solutions for the Compensation Problem," Journal of Economic Theory, Elsevier, vol. 65(2), pages 505-521, April.
    14. Maurice Salles, 2005. "Social Choice," Post-Print halshs-00337075, HAL.
    15. Fleurbaey, Marc, 1995. "Equality and responsibility," European Economic Review, Elsevier, vol. 39(3-4), pages 683-689, April.
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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, Open Access Journal, 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.

    More about this item


    egalitarian; justice; reward;

    JEL classification:

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

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