A Matter of Perspective: How Experience Shapes Preferences for Redistribution

30 Pages Posted: 16 Feb 2017

See all articles by Lea Cassar

Lea Cassar

University of Cologne

Arnd Klein

University of Zurich

Date Written: Novemeber 10, 2016

Abstract

We investigate in a laboratory experiment if the experience of economic failure or success shapes people’s preferences for redistribution beyond self-interest. Subjects generated a high or a low income either through a lottery or through an effort-based tournament. A sub-set of subjects could then redistribute the income of another sub-set of subjects. We find that individuals who lost the tournament (lottery) redistribute significantly more than all the other types of distributors when the inequality is generated by the tournament (lottery). The effect still holds when controlling for self-selection into different outcomes of the tournament and can be explained by in- or out-group bias and a self-serving bias in responsibility attribution. These findings have implications for public policies and for the design of compensation schemes in organizations.

Keywords: Distributive Justice, Experience, Failure, In-Group Bias, Self-Serving Bias

JEL Classification: D310, D630, H230, M520

Suggested Citation

Cassar, Lea and Klein, Arnd, A Matter of Perspective: How Experience Shapes Preferences for Redistribution (Novemeber 10, 2016). CESifo Working Paper Series No. 6302, Available at SSRN: https://ssrn.com/abstract=2918721

Lea Cassar (Contact Author)

University of Cologne ( email )

Albertus-Magnus-Platz
Cologne, 50923
Germany

Arnd Klein

University of Zurich ( email )

Rämistrasse 71
Zürich, CH-8006
Switzerland

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