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Cutthroat capitalism versus cuddly socialism: Are Americans more meritocratic and efficiency-seeking than Scandinavians?

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  • Ingvild Almås

    () (Norwegian School of Economics)

  • Alexander Cappelen

    () (Norwegian School of Economics)

  • Bertil Tungodden

    () (Norwegian School of Economics)

Abstract

There is a striking difference in income inequality and redistributive policies between the United States and Scandinavia. To study whether there is a corresponding cross-country difference in social preferences, we conducted the first large-scale international social preference experiment, with nationally representative samples from the United States and Norway. We introduce a new experimental approach, which combines the infrastructure of an international online market place and the infrastructure of a leading international data collection agency. A novel feature of our experiment is that Americans and Norwegians make real distributive choices in identical situations where they have complete information about the source of inequality and the cost of redistribution. We show that Americans and Norwegians differ significantly in fairness views, but not in the importance assigned to efficiency. The study also provides robust causal evidence of fairness considerations being much more fundamental for inequality acceptance than efficiency considerations in both countries.

Suggested Citation

  • Ingvild Almås & Alexander Cappelen & Bertil Tungodden, 2017. "Cutthroat capitalism versus cuddly socialism: Are Americans more meritocratic and efficiency-seeking than Scandinavians?," Working Papers 2017-003, Human Capital and Economic Opportunity Working Group.
  • Handle: RePEc:hka:wpaper:2017-003
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    Cited by:

    1. Edwin Ip & Andreas Leibbrandt & Joseph Vecci, 2018. "How Do Gender Quotas Affect Hierarchical Relationships? Complementary Evidence from a Respresentative Survey and Labor Market Experiments," CESifo Working Paper Series 6915, CESifo Group Munich.
    2. Alexander Cappelen & Karl Ove Moene & Siv-Elisabeth Skjelbred & Bertil Tungodden, 2017. "The Merit Primacy Effect," Working Papers 2017-047, Human Capital and Economic Opportunity Working Group.
    3. Pedro Rey-Biel & Roman Sheremeta & Neslihan Uler, 2015. "When Income Depends on Performance and Luck: The Effects of Culture and Information on Giving," Working Papers 15-12, Chapman University, Economic Science Institute.
    4. Bortolotti, Stefania & Soraperra, Ivan & Sutter, Matthias & Zoller, Claudia, 2017. "Too Lucky to Be True: Fairness Views under the Shadow of Cheating," IZA Discussion Papers 10877, Institute for the Study of Labor (IZA).
    5. repec:eee:joepsy:v:65:y:2018:i:c:p:60-74 is not listed on IDEAS
    6. repec:eee:pubeco:v:155:y:2017:i:c:p:54-63 is not listed on IDEAS
    7. Stefania Bortolotti & Ivan Soraperra & Matthias Sutter & Claudia Zoller, 2017. "Too Lucky to be True - Fairness Views under the Shadow of Cheating," CESifo Working Paper Series 6563, CESifo Group Munich.

    More about this item

    Keywords

    income inequality; redistribution; Norway; fairness; Efficiency;

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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