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Inequality and Relative Ability Beliefs

Jeffrey Vincent Butler ()

No 1305, EIEF Working Papers Series from Einaudi Institute for Economics and Finance (EIEF)

Abstract: In this study I present experimental evidence of a novel channel yielding inequality persistence. In an initial experiment, results suggest that individuals respond to salient inequality by adjusting their performance beliefs to justify the inequality. Subsequent experiments reveal: i) that it is beliefs about relative ability, an ostensibly stable trait, rather than effort provision that respond to inequality; and that ii) unequal pay in an initial task affects willingness to compete on a subsequent task for male participants. Taken together, these patterns may cause inequality to become self-perpetuating. I conclude by discussing some implications of these findings.

New Economics Papers: this item is included in nep-evo, nep-exp, nep-hpe, nep-hrm and nep-ltv
Date: 2013, Revised 2013-03
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Persistent link: http://EconPapers.repec.org/RePEc:eie:wpaper:1305

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