Through the Looking Glass: Transparency about Others' Luck and Effort Enhances Redistribution

Juliane V. Wiese (), Nattavudh Powdthavee, Jonathan Yeo () and Yohanes Riyanto
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Juliane V. Wiese: Warwick Business School
Jonathan Yeo: Nanyang Technological University, Singapore

No 15909, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: How do we persuade people to part with money they feel they have rightly earned? We conducted a dyadic experiment (N=1,986) where luck determined which of the players' performance counted toward winning the game. Despite luck playing a large part, we found strong evidence of justified deservingness among the winners. The better they performed in the task, the less they redistributed to their nonwinning partner. However, in treatments where performance was transparent, winners significantly increased redistribution to nonwinners who performed similarly well. We find that transparency can effectively alter redistributive preferences even when people feel fully deserving of their income.

Keywords: luck; efforts; survivalship bias; redistribution; inequality; deservingness (search for similar items in EconPapers)
JEL-codes: C9 D9 (search for similar items in EconPapers)
Pages: 87 pages
Date: 2023-01
New Economics Papers: this item is included in nep-cbe, nep-exp, nep-ltv and nep-sea
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