Distributional preferences in larger groups: Keeping up with the Joneses and keeping track of the tails

Raymond Fisman, Ilyana Kiziemko and Silvia Vannutelli

No dp-301, Boston University - Department of Economics - The Institute for Economic Development Working Papers Series from Boston University - Department of Economics

Abstract: We study distributional preferences in “large†groups. While most prior experi- ments have focused on exploring attitudes toward inequality in two- or three-person groups, we field a series of experiments via Mechanical Turk in which subjects choose between two income distributions, each with seven (or nine) individuals, with hypo- thetical incomes that aim to approximate the actual distribution of income in the U.S. Our setting thus provides a more direct comparison to the redistributive choices faced by society. Consistent with standard maximin (Rawlsian) preferences, subjects select distributions in which the bottom individual’s income is higher (but show little regard for lower incomes above the bottom ranking). In contrast to standard models, however, we find that subjects select distributions that lower the top individual’s income, but not other high incomes. Finally, we provide tentative evidence of “locally competitive†preferences—in most experimental sessions, subjects select distributions that lower the income of the individual directly above them, while the income of the individual two positions above has little effect on subjects’ decisions. Our findings suggest that the- ories of inequality aversion should be enriched to account for individuals’ aversion to “topmost†and “local†disadvantageous inequality.

Keywords: Inequality aversion; Envy; Redistribution (search for similar items in EconPapers)
JEL-codes: C91 D63 H23 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2018-02
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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Related works:
Journal Article: Distributional Preferences in Larger Groups: Keeping up with the Joneses and Keeping Track of the Tails (2021)
Working Paper: Distributional preferences in larger groups: Keeping up with the Joneses and keeping track of the tails (2018)
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