Last word not yet spoken: a reinvestigation of last place aversion with aversion to rank reversals

Andrea Martinangeli and Lisa Windsteiger ()
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Lisa Windsteiger: Max Planck Institute for Tax Law and Public Finance

Experimental Economics, 2021, vol. 24, issue 3, No 4, 800-820

Abstract: Abstract Preferences over social ranks have emerged as potential drivers of weaker than expected support for redistributive interventions among those closest to the bottom of the income distribution. We compare preferences for alterations of the income distribution affecting the decision maker’s social rank, but not their income, and compare them with similar alterations leaving both rank and income unchanged. Our study fails to find evidence of last-place aversion in a replication of Kuziemko et al. (Q J Econ 129(1):105–149, 2014). However, using a modified design that holds ranks fixed across rounds we find support for both a discontinuously greater disutility from occupying the last as opposed to higher ranks, thus affecting only those closest to the bottom of the distribution, and for a general dislike of rank reversals affecting most ranks. We discuss implications for policy design in both public finance and management science.

Keywords: Income distribution; Last place aversion; Positional concerns; Preferences for redistribution; Rank reversal aversion (search for similar items in EconPapers)
JEL-codes: C91 D31 H23 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (4)

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DOI: 10.1007/s10683-020-09682-8

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