A Meritocratic Origin of Egalitarian Behavior

68 Pages Posted: 2 May 2019

See all articles by Alexander W. Cappelen

Alexander W. Cappelen

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

Johanna Mollerstrom

George Mason University - Department of Economics; Research Institute of Industrial Economics (IFN)

Bjørn-Atle Reme

Bjørn-Atle Reme, Telenor Reseach

Bertil Tungodden

Norwegian School of Economics (NHH) - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: April 29, 2019

Abstract

The meritocratic fairness ideal implies that inequalities in earnings are regarded as fair only when they reflect differences in performance. Consequently, implementation of the meritocratic fairness ideal requires complete information about individual performances, but in practice, such information is often not available. We study redistributive behavior in the common, but previously understudied, situation where there is uncertainty about whether inequality is reflecting performance or luck. We show theoretically that meritocrats in such situations can become very egalitarian in their behavior, and that the degree to which this happens depends on how they trade off the probability of making mistakes and the size of mistakes that they risk making when redistributing under uncertainty. Our laboratory experiments show, in line with our model, that uncertainty about the source of inequality provides a strong egalitarian pull on the behavior of meritocrats. In addition, the external validity of our framework, and the results from the laboratory, are supported in two general population surveys conducted in the United States and Norway.

Keywords: inequality, fairness, redistribution, responsibility, performance, luck, experiment, survey

JEL Classification: C91, D63, D81, H23

Suggested Citation

Cappelen, Alexander W. and Mollerstrom, Johanna and Reme, Bjørn-Atle and Tungodden, Bertil, A Meritocratic Origin of Egalitarian Behavior (April 29, 2019). NHH Dept. of Economics Discussion Paper No. 09/2019. Available at SSRN: https://ssrn.com/abstract=3381575 or http://dx.doi.org/10.2139/ssrn.3381575

Alexander W. Cappelen (Contact Author)

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

Johanna Mollerstrom

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States

HOME PAGE: http://https://sites.google.com/site/johannamollerstrom/

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

Bjørn-Atle Reme

Bjørn-Atle Reme, Telenor Reseach ( email )

Snarøyveien 30 C
Oslo, 1360
Norway

Bertil Tungodden

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

Helleveien 30
N-5035 Bergen
Norway

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