A choice experiment on the elicitation of preferences (original) (raw)
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An experimental study on individual choice, social welfare, and social preferences
European Economic Review, 2009
We experimentally study subjects' compliance with dominance relationships of income distributions in a ranking task. The experiment consisted of four different treatments: lottery, individual choice, social preferences, and social planner. Our results suggest that people's risk attitudes do not adequately reflect their inequality attitudes. Uninvolved social planners exhibit randomization preferences, while self-interested social planners are generally more inequality averse and try to avoid extreme outcomes.
Experimental Economics, 2017
We explore the relation between redistribution choices, source of income, and pre-redistribution inequality. Previous studies find that when income is earned through work there is less support for redistribution than when income is determined by luck. Using a lab experiment, we vary both the income-generating process (luck vs. performance) and the level of inequality (low vs. high). We find that an increase in inequality has less impact on redistribution choices when income is earned through performance than when income results from luck. This result is likely explained by individuals using income differences as a heuristic to infer relative deservingness. If people believe income inequality increases as a result of performance rather than luck, then they are likely to believe the poor deserve to stay poor and the rich deserve to stay rich.
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 suggest 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.
Debiasing preferences over redistribution: an experiment
Social Choice and Welfare, 2020
We study the manipulation of preferences over redistribution. Previous work showed that preferences over redistribution are malleable by the experience of success or failure in a preceding real-effort task. We manipulate the information subjects receive about the importance of chance relative to effort in determining success. We investigate the effect of this manipulation on (i) subjects' redistribution choices affecting third parties, and (ii) preferences for redistributive taxation. Our results show that informing the subjects about the relative importance of chance after the real-effort task does not mitigate the self-serving bias in redistribution choices. Only providing full information before the real-effort task prevents the emergence of the self-serving bias.
Individual choice and other-regarding preferences: experimental evidence
This paper analyzes the impact of inequality in the distribution of endowments on contributions. We conduct a lab experiment using the well-known Public Good Game to test the relation between inequality and contribution to a public fund. We introduce the possibility of choosing among three different redistribution rules: equidistribution, proportional to contribution and progressive to endowment. This novelty, combined with a payoff function that depends also on previous period behavior, allows us to verify the hypothesis that players show inequity averse preferences. Results show that inequality has a negative impact on individual contribution. Since inequality decreases during repetitions, we deduce that players show inequity averse preferences.
Inequality Aversion, Efficiency, and Maximin Preferences in Simple Distribution Experiments
2002
We present simple one-shot distribution experiments comparing the relative importance of efficiency, maximin preferences and inequality aversion, as well as the relative performance of the fairness theories by Bolton and Ockenfels and . While the Fehr and Schmidt model performs better in a direct comparison, this appears to be due to being in line with maximin preferences. More importantly, we find that the influence of both efficiency and maximin preferences is stronger than that of inequality aversion. We discuss potential implications our results might have for the interpretation of other experiments.
SSRN Electronic Journal, 2015
This study uses a lab experiment to examine the relation between income inequality and individual redistribution choices. The median voter theorem suggests that support for redistribution should increase when inequality increases. However, empirically this is not always the case. Using a difference-indifferences strategy, we find that the relation between inequality and redistribution preferences differs depending on how income is assigned. Specifically, we find that increases in effort-based income inequality lead to lower redistribution rates while increases in random income inequality lead to higher redistribution rates. These findings support a model where preferences for redistribution depend upon work earnings as a signal of deservingness.
Experimental Evidence on Inequity Aversion and Self-Selection between Incentive Contracts
SSRN Electronic Journal, 2008
Group performance-based payment schemes appear to be widely used on the business place but …rms di¤er in the distribution of the group production between members of the group. We consider agents heterogeneous depending on their inequity aversion degrees in the sense of Fehr and Schmidt (1999). The theory predicts the self-selection of agents at the equilibrium between a competitive payment scheme and a revenue-sharing one depending on their degrees of inequity aversion. The average e¢ ciency should be increased when these payment schemes are endogenously chosen by agents. We conducted a laboratory experiment to test these hypotheses. The results underline that sel…sh agents prefer to be compensated by a competition while inequity averse agents prefer the revenue-sharing structure. The self-selection of agents is e¢ cient concerning the choice of the competition but it is not perfect regarding the revenue-sharing scheme due to a heterogeneity of e¤ort behaviors in the …rst half of the experiment. The e¢ ciency is increased by a raise of the average e¤ort level under the competition. Agents'payo¤s average is also increased for agents who prefered a speci…c payment scheme, by reaching more often the Pareto optimum.