Equality, Equity and Incentives: An Experiment

61 Pages Posted: 4 Oct 2010

See all articles by Loukas Balafoutas

Loukas Balafoutas

University of Innsbruck

Martin G. Kocher

University of Vienna

Louis Putterman

Brown University - Department of Economics

Matthias Sutter

Max Planck Institute for Research on Collective Goods

Multiple version iconThere are 2 versions of this paper

Abstract

We devise a new experimental game by nesting a voluntary contributions mechanism in a broader spectrum of incentive schemes. With it, we study tensions between egalitarianism, equity concerns, self-interest, and the need for incentives. In a 2x2 design, subjects either vote on or exogenously encounter incentive settings while assigned unequal incomes that are either task-determined or random. We find subjectsメ voting to be mainly self-interested but also influenced by egalitarian and equity concerns, which sometimes cut in opposite directions. Contributions, which seem mainly determined by boundedly rational responses to incentives, are influenced by egalitarian, equity and strategic considerations.

Keywords: equality, efficiency, voluntary contribution mechanism, incentives, experiment

JEL Classification: C91, C92, D31, D63, H41

Suggested Citation

Balafoutas, Loukas and Kocher, Martin G. and Putterman, Louis G. and Sutter, Matthias, Equality, Equity and Incentives: An Experiment. IZA Discussion Paper No. 5204, Available at SSRN: https://ssrn.com/abstract=1686495 or http://dx.doi.org/10.2139/ssrn.1686495

Loukas Balafoutas (Contact Author)

University of Innsbruck ( email )

Universitätsstraße 15
Innsbruck, Innsbruck 6020
Austria

Martin G. Kocher

University of Vienna ( email )

Bruenner Strasse 72
Vienna, Vienna 1090
Austria

Louis G. Putterman

Brown University - Department of Economics ( email )

Box B
Providence, RI 02912
United States
401-863-3837 (Phone)
401-863-1970 (Fax)

Matthias Sutter

Max Planck Institute for Research on Collective Goods ( email )

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
85
Abstract Views
1,197
Rank
349,930
PlumX Metrics