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Fairness in winner-take-all competitions

Author

Listed:
  • Björn Bartling
  • Alexander W. Cappelen
  • Mathias Ekström
  • Erik Ø. Sørensen
  • Bertil Tungodden

Abstract

This paper reports the results of a large-scale incentivized experiment investigating individuals’ fairness perceptions of the extreme income inequalities generated in winner-take-all competitions. We find that extreme income inequality in winner-take-all competitions is commonly accepted in our sample of 4,000 participants from the general population of the U.S., even when the winner outperforms the runner-up by the smallest possible margin. Generally, fairness judgements are only weakly influenced by the winning margin, which reveals that the mere fact of winning — be it by a tiny margin or by a substantial gap — justifies resulting inequalities. Our results improve understanding of public attitudes toward fairness and redistributive policies in winner-take-all competitions marked by extreme income inequalities.

Suggested Citation

  • Björn Bartling & Alexander W. Cappelen & Mathias Ekström & Erik Ø. Sørensen & Bertil Tungodden, 2018. "Fairness in winner-take-all competitions," ECON - Working Papers 287, Department of Economics - University of Zurich, revised Aug 2024.
    • Handle: RePEc:zur:econwp:287
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    File URL: https://www.zora.uzh.ch/id/eprint/151317/7/econwp287.pdf
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    3. Schwaiger, Rene & Huber, Jürgen & Kirchler, Michael & Kleinlercher, Daniel & Weitzel, Utz, 2022. "Unequal opportunities, social groups, and redistribution: Evidence from Germany," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 100(C).
    4. König, Tobias & Mechtenberg, Lydia & Kübler, Dorothea & Schmacker, Renke, 2023. "Fairness in matching markets: Experimental evidence," Discussion Papers, Research Unit: Market Behavior SP II 2023-204, WZB Berlin Social Science Center.
    5. Peter Andre, 2021. "Shallow Meritocracy: An Experiment on Fairness Views," CRC TR 224 Discussion Paper Series crctr224_2021_318v1, University of Bonn and University of Mannheim, Germany.
    6. Dong, Zhiqiang & Zhang, Yanren, 2022. "Tournaments as coordination devices: Theory and experimental evidence," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 100(C).
    7. Granaglia, Elena, 2019. "Can market inequalities be justified? The intrinsic shortcomings of meritocracy," Structural Change and Economic Dynamics, Elsevier, vol. 51(C), pages 284-290.

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    More about this item

    Keywords

    Winner-take-all competitions; winning margin; merit; fairness; income inequality; redistributive policies;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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