"Should CEOs' Salaries Be Capped?" A Survey Experiment on Limitarian Preferences

João V. Ferreira, Stratos Ramoglou, Foivos Savva and Michael Vlassopoulos ()
Additional contact information
João V. Ferreira: University of Southampton
Stratos Ramoglou: University of Southampton
Michael Vlassopoulos: University of Southampton

No 17171, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper investigates preferences for limiting top incomes and wealth through a survey-based experiment with a large sample of participants (N = 3,954) from the US and Germany. Using a revealed preferences approach, we find that a significant majority (around 85%) of participants support income limits (have limitarian preferences). Importantly, we also find that a large share of these participants are driven by inequality aversion (weak limitarians), while a significant proportion of participants (around 30%) support limits irrespective of inequality (strong limitarians). Preferences for wealth caps are more polarized than for income caps, with higher shares of strong limitarians and those who oppose limits (non-limitarians). Notably, our participant classification predicts "real-world" voting behavior in a petition that required effort to sign. In terms of underlying motivations, strong limitarians exhibit less concern about the negative impacts of limits on economic efficiency, are less inclined to attribute top incomes and wealth to merit, are more supportive of government redistribution, and are more concerned about the effects of wealth concentration on corruption and the environment. These findings have important implications for economic theories of social preferences and can inform policy discussions around CEO compensation and wealth taxation.

Keywords: CEO compensation; limitarianism; limitarian preferences; income cap; wealth cap; wealth taxation (search for similar items in EconPapers)
JEL-codes: D3 D6 D9 H2 M12 (search for similar items in EconPapers)
Pages: 72 pages
Date: 2024-07
New Economics Papers: this item is included in nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://docs.iza.org/dp17171.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp17171

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().