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Who helps whom? Risk taking and solidarity in a virtual world experiment

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  • Lübbe, Ingmar
  • Bolle, Friedel

Abstract

Most incomes underlie some risk, i.e. ex ante they can be regarded as a lottery ticket. In every society, the lucky winners of this lottery compensate unlucky losers (unemployed workers or bankrupt entrepreneurs) privately and/or by public insurances. Do voluntary solidarity payments depend on the amount and origin of risk of winners and losers? We differentiate between people with riskless incomes (civil servants), with low risk incomes (workers), and with high risk incomes (entrepreneurs). Some of our subjects had no choice of their risk class (civil servants and some workers), some of them had the choice to be a worker or an entrepreneur. The main stylized results are: (i) Civil servants and lucky workers with and without a choice transfer similar shares of their income to unlucky workers, but (ii) discriminate against unlucky entrepreneurs. (iii) Lucky entrepreneurs give about the same share of their income to unlucky workers as lucky workers do and (iv) do not significantly discriminate. (v) The potential solidarity payments are not an incentive for taking higher risks.

Suggested Citation

  • Lübbe, Ingmar & Bolle, Friedel, 2011. "Who helps whom? Risk taking and solidarity in a virtual world experiment," Discussion Papers 310, European University Viadrina Frankfurt (Oder), Department of Business Administration and Economics.
  • Handle: RePEc:zbw:euvwdp:310
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    References listed on IDEAS

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    1. Friedel Bolle & Yves Breitmoser & Jana Heimel & Claudia Vogel, 2012. "Multiple motives of pro-social behavior: evidence from the solidarity game," Theory and Decision, Springer, vol. 72(3), pages 303-321, March.
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    4. Buchner, Susanne & Coricelli, Giorgio & Greiner, Ben, 2007. "Self-centered and other-regarding behavior in the solidarity game," Journal of Economic Behavior & Organization, Elsevier, vol. 62(2), pages 293-303, February.
    5. Friedel Bolle & Claudia Vogel, 2011. "Power comes with responsibility—or does it?," Public Choice, Springer, vol. 148(3), pages 459-470, September.
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    11. Selten, Reinhard & Ockenfels, Axel, 1998. "An experimental solidarity game," Journal of Economic Behavior & Organization, Elsevier, vol. 34(4), pages 517-539, March.
    12. Cappelen, Alexander W. & Sørensen, Erik Ø. & Tungodden, Bertil, 2010. "Responsibility for what? Fairness and individual responsibility," European Economic Review, Elsevier, vol. 54(3), pages 429-441, April.
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    More about this item

    Keywords

    solidarity; responsibility; risk taking;

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers

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