Fair Institutions

Weijia Wang () and Justin Valasek ()
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Weijia Wang: Dept. of Economics, Norwegian School of Economics and Business Administration, Postal: NHH, Department of Economics, Helleveien 30, N-5045 Bergen, Norway, https://sites.google.com/view/weijia-wang
Justin Valasek: Dept. of Economics, Norwegian School of Economics and Business Administration, Postal: NHH, Department of Economics, Helleveien 30, N-5045 Bergen, Norway, https://justinvalasek.com/

No 8/2025, Discussion Paper Series in Economics from Norwegian School of Economics, Department of Economics

Abstract: The experimental literature on preferences for redistribution has established that individual perceptions of what earning distributions are fair depend greatly on context. In this paper, we study an important and novel dimension of context: whether the choice to redistribute occurs before workers work and accrue earnings, or after. Contrary to the predictions of our theoretical framework, we fi nd no evidence that spectators are less likely to equalize earnings ex ante than to equalize earnings ex post. Interestingly, our study also suggests that, relative to American subjects, Scandinavian subjects are more likely to equalize ex post earnings, but we find no evidence that Scandinavian and American subjects make different choices ex ante. A follow-up analysis suggests that the latter result is largely due to Scandinavian and American subjects having similar preferences over ex ante redistribution when equalizing earnings comes at a cost to efficiency. Overall, our results suggest that context-dependent preferences for redistribution are sensitive to the relative timing of the redistribution choice.

Keywords: Inequality; Fairness; Institutions; Experiment (search for similar items in EconPapers)
JEL-codes: C91 D63 J16 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2025-04-01
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