Coordination via Redistribution

47 Pages Posted: 27 Nov 2017

See all articles by Andrea Martinangeli

Andrea Martinangeli

Max Planck Institute for Tax Law and Public Finance

Peter Martinsson

Göteborg University - Department of Economics and Statistics

Amrish Patel

University of East Anglia (UEA)

Date Written: November 23, 2017

Abstract

Can prior voluntary redistribution improve coordination? We theoretically show that distributive preferences, forward induction and signalling all imply that it can. We then experimentally test our predictions by allowing subjects to redistribute part of their endowment before playing a battle of the sexes game. To identify whether the redistribution option increases coordination, and why, we also run experiments with no redistribution and forced redistribution. Our results show that the redistribution option does indeed significantly increase coordination. Disentangling the reasons why, we find that behaviour is most consistent with distributive preferences and one-step of forward induction (rather than signalling or two-steps of forward induction).

Keywords: Coordination, redistribution, experiment, distributive preferences, forward induction, signalling altruism

JEL Classification: C72, D02

Suggested Citation

Martinangeli, Andrea and Martinsson, Peter and Patel, Amrish, Coordination via Redistribution (November 23, 2017). Working Paper of the Max Planck Institute for Tax Law and Public Finance No. 2017-7. Available at SSRN: https://ssrn.com/abstract=3076310 or http://dx.doi.org/10.2139/ssrn.3076310

Andrea Martinangeli (Contact Author)

Max Planck Institute for Tax Law and Public Finance ( email )

Marstallplatz 1
Munich, 80539
Germany

Peter Martinsson

Göteborg University - Department of Economics and Statistics ( email )

Box 640
Vasagatan 1, E-building, floor 5 & 6
Göteborg, 40530
Sweden

Amrish Patel

University of East Anglia (UEA) ( email )

Norwich Research Park
Norwich, Norfolk NR4 7TJ
United Kingdom

Register to save articles to
your library

Register

Paper statistics

Downloads
21
Abstract Views
172
PlumX Metrics