Strategic Choices for Redistribution and the Veil of Ignorance: Theory and Experimental Evidence
53 Pages Posted: 30 May 2013 Last revised: 22 Jul 2014
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Strategic Choices for Redistribution and the Veil of Ignorance: Theory and Experimental Evidence
Strategic Choices for Redistribution and the Veil of Ignorance: Theory and Experimental Evidence
Date Written: July 21, 2014
Abstract
We provide theoretical conjectures about and experimental evidence on the emergence of redistributive societies. Individuals first vote on a distribution rule with their feet and then invest and redistribute total income according to the chosen rule. We vary the individuals’ information about their productivity at the time they choose a distribution rule and find that there is more redistribution behind a veil of ignorance than in the glare of full information. However, the scope of redistribution is less sensitive to the degree of uncertainty than predicted by a model of selfish and rational expected utility maximizers. For all degrees of uncertainty, we find a coexistence of libertarianism and redistribution as well as imperfect segregation, so that heterogeneous redistribution communities turn out to be sustainable.
Keywords: Constitutional Choice, Experimental Economics, Redistribution, Veil of Ignorance, Voting by Feet
JEL Classification: C91, D02, D63, H24, K00
Suggested Citation: Suggested Citation
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