Equality of opportunity, moral hazard and the timing of luck

Arnaud Lefranc and Alain Trannoy

Social Choice and Welfare, 2017, vol. 49, issue 3, No 5, 469-497

Abstract: Abstract Equality of opportunity is usually defined as a situation where the effect of circumstances on outcome is nullified (compensation principle) and effort is rewarded (reward principle). We propose a new version of the reward principle based on the idea that effort deserves reward for it is costly. We show that luck can be introduced in two ways in the definition of these principles, depending on whether the correlation between luck and circumstances should be nullified and whether the correlation between luck and effort should be rewarded. In this regard, the timing of luck with respect to effort decisions is crucial, as is exemplified by moral hazard where effort choice influences the lottery of future uncertain events.

Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

Downloads: (external link)
http://link.springer.com/10.1007/s00355-017-1054-8 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
Working Paper: Equality of opportunity, moral hazard and the timing of luck (2017)
Working Paper: Equality of Opportunity, Moral Hazard and the Timing of Luck (2017)
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:spr:sochwe:v:49:y:2017:i:3:d:10.1007_s00355-017-1054-8

Ordering information: This journal article can be ordered from
http://www.springer. ... c+theory/journal/355

DOI: 10.1007/s00355-017-1054-8

Access Statistics for this article

Social Choice and Welfare is currently edited by Bhaskar Dutta, Marc Fleurbaey, Elizabeth Maggie Penn and Clemens Puppe

More articles in Social Choice and Welfare from Springer, The Society for Social Choice and Welfare Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().