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Rich Meets Poor – An International Fairness Experiment

31 Pages Posted: 17 Feb 2010  

Alexander W. Cappelen

Norwegian School of Economics (NHH) - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Karl O. Moene

University of Oslo - Department of Economics

Erik Sorensen

Norwegian School of Economics (NHH) - Department of Economics

Bertil Tungodden

Norwegian School of Economics (NHH) - Department of Economics

Date Written: September 2008

Abstract

Why do people in rich countries not transfer more of their income to people in the world's poorest countries? To study this question and the relative importance of needs, entitlements, and nationality in people's social preferences, we conducted a real effort fairness experiment where people in two of the world's richest countries, Norway and Germany, interacted directly with people in Uganda and Tanzania, two of the world's poorest countries. In this experiment, the participants were given the opportunity to transfer money to poor persons with whom they were matched. The study provides four main findings. First, entitlement considerations are crucial in
explaining the distributive behavior of rich people in the experiment; second, needs considerations matter a lot for some participants; third, the participants acted as moral cosmopolitans; and finally, the participants' choices are consistent with a self-serving bias in their social preferences.

Suggested Citation

Cappelen, Alexander W. and Moene, Karl O. and Sorensen, Erik and Tungodden, Bertil, Rich Meets Poor – An International Fairness Experiment (September 2008). NHH Dept. of Economics Discussion Paper No. 22/2008. Available at SSRN: https://ssrn.com/abstract=1553759 or http://dx.doi.org/10.2139/ssrn.1553759

Alexander W. Cappelen

Norwegian School of Economics (NHH) - Department of Economics ( email )

Helleveien 30
N-5035 Bergen
Norway

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Karl O. Moene

University of Oslo - Department of Economics ( email )

P.O. Box 1095 Blindern
N-0317 Oslo
Norway
+47 22855130 (Phone)
+47 22855035 (Fax)

Erik Sorensen

Norwegian School of Economics (NHH) - Department of Economics ( email )

Helleveien 30
Bergen, NO-5045
Norway

Bertil Tungodden (Contact Author)

Norwegian School of Economics (NHH) - Department of Economics ( email )

Helleveien 30
N-5035 Bergen
Norway

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