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Fairness in Winner-Take-All Markets

Björn Bartling (), Alexander Cappelen (), Mathias Ekström (), Erik Sørensen () and Bertil Tungodden ()
Additional contact information
Björn Bartling: University of Zurich, Postal: University of Zurich, Department of Economics, Blümlisalpstrasse 10, Room BLU-210, 8006 Zurich, http://www.econ.uzh.ch/en/people/faculty/bartling.html
Mathias Ekström: Dept. of Economics, Norwegian School of Economics and Business Administration, Postal: NHH , Department of Economics, Helleveien 30, N-5045 Bergen, Norway, https://www.nhh.no/en/employees/faculty/mathias-philip-ekstrom/

No 8/2018, Discussion Paper Series in Economics from Norwegian School of Economics, Department of Economics

Abstract: The paper reports the first experimental study on people’s fairness views on extreme Income inequalities arising from winner-take-all reward structures. We find that the majority of participants consider extreme income inequality generated in winner-take-all situations as fair, independent of the winning margin. Spectators appear to endorse a “factual merit” fairness argument for no redistribution: the winner deserves all the earnings because these earnings were determined by his or her performance. Our findings shed light on the present political debate on redistribution, by suggesting that people may object less to certain types of extreme income inequality than commonly assumed.

Keywords: Winner-take-all reward structures; fairness; income inequality (search for similar items in EconPapers)
JEL-codes: C91 D63 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-hpe
Date: 2018-04-30
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Working Paper: Fairness in Winner-Take-All Markets (2018) Downloads
Working Paper: Fairness in Winner-Take-All Markets (2018) Downloads
Working Paper: Fairness in Winner-Take-All Markets (2018) Downloads
Working Paper: Fairness in winner-take-all markets (2018) Downloads
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