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Property, Redistribution, and the Status Quo

Konstantin Chatziathanasiou (), Svenja Hippel () and Michael Kurschilgen ()
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Konstantin Chatziathanasiou: University of Münster
Svenja Hippel: Unversity of Würzburg
Michael Kurschilgen: Technical University of Munich and the Max Planck Institute for Research on Collective Goods

Munich Papers in Political Economy from TUM School of Governance at the Technical University of Munich

Abstract: A large strand of research has documented negative behavioral responses to redistribution, like lower effort and wasteful avoidance activity. We report experimental evidence showing a positive effect of redistribution on economic efficiency via the self-enforcement of property rights, and identify which status groups benefit more and which less. We model an economy in which wealth is produced if players voluntarily comply with the – efficient but inequitable – prevailing social order. We vary exogenously whether redistribution is feasible, and how it is organized. We find that redistribution benefits all status groups as property disputes recede. It is most effective when transfers are not discretionary but instead imposed by some exogenous administration. In the absence of coercive means to enforce property rights, it is the higher status groups, not the lower status groups, who benefit from redistribution being compulsory rather than voluntary.

Keywords: Redistribution; Property; Status; Correlated Equilibrium; Battle of Sexes; Experiment (search for similar items in EconPapers)
JEL-codes: C72 C92 D74 H23 P48 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2020-09
New Economics Papers: this item is included in nep-exp
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