Measuring tastes for equity and aggregate wealth behind the veil of ignorance

Jan Heufer, Jason Shachat and Yan Xu

Games and Economic Behavior, 2025, vol. 153, issue C, 209-232

Abstract: We propose an instrument to measure individuals' social preferences regarding equity and efficiency behind a veil of ignorance while controlling for idiosyncratic risk preferences. We construct a battery of portfolio and wealth distribution choice problems sharing a common budget set. A given bundle induces the same distribution over an individual's wealth in both problems. The portfolio choice solely reflects an individual's risk attitude, providing a benchmark to evaluate whether their wealth distribution choice exhibits equity or efficiency preferring tastes. Our experiments show clusters of social preference types, which are unexpectedly independent of risk preferences.

Keywords: Inequity aversion; Revealed preference; Risk preferences; Social preferences; Veil of ignorance (search for similar items in EconPapers)
JEL-codes: C14 C91 D11 D12 D63 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:153:y:2025:i:c:p:209-232

DOI: 10.1016/j.geb.2025.06.005

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