Who Deserves Redistribution? The Role of Prosocial Motives

Abstract

The paper studies whether (and how) redistributive choices aim to reward others’ sacrifice of their own interest for the community’s sake and whether this introduces a trade-off between the willingness to reward cooperation and a pure meritocratic ideal. We design an online social preference experiment and collect information on real redistribution in favor of subjects that differ in relative performance and relative wealth. The reduced-form estimates indicate that cooperative behavior plays a major role in making people deserve redistribution. Furthermore, we find that redistribution to reward cooperation is influenced by the subjects’ wealth. When wealthier subjects show the same (un)cooperative behavior as poorer ones, they are rewarded less (punished more) than poorer ones. To quantify the weight of cooperative behavior in redistribution, we present a simple model and structurally estimate its parameters. We find that a percentage between 37% and 56% of total redistribution is driven by reciprocity concerns.

Keywords: survey experiment, redistribution, Cooperation, inequality, reciprocity