Promoting Competition or Helping the Less Endowed? Distributional Preferences and Collective Institutional Choices under Intra-Group Inequality

43 Pages Posted: 22 Jun 2014 Last revised: 3 Jun 2016

See all articles by Kenju Kamei

Kenju Kamei

Durham University - Department of Economics and Finance

Date Written: May 2, 2016

Abstract

Unequally distributed resources are ubiquitous. The decision of whether to promote competition or equality is often debated in societies and organizations. With heterogeneous endowments, we let subjects collectively choose between a public good that most benefits the less endowed, and a lottery contest in which only one individual in a group receives a prize. Unlike standard theoretical predictions, the majority of subjects, including a substantial number of subjects who believe that their expected payoffs are better in the contest, vote for the public good. Our data suggests that people’s collective institutional choices may be driven by inequality-averse concerns. It also suggests that the collective decision to select the option for the public good depends on voting rules.

Keywords: heterogeneity, experiment, cooperation, competition, public goods, inequality

JEL Classification: C92, D04, D70, H41

Suggested Citation

Kamei, Kenju, Promoting Competition or Helping the Less Endowed? Distributional Preferences and Collective Institutional Choices under Intra-Group Inequality (May 2, 2016). Available at SSRN: https://ssrn.com/abstract=2457242 or http://dx.doi.org/10.2139/ssrn.2457242

Kenju Kamei (Contact Author)

Durham University - Department of Economics and Finance ( email )

Durham, DH1 3HY
United Kingdom

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