Equality, Equity and Incentives: An Experiment

Loukas Balafoutas, Martin Kocher, Louis Putterman and Matthias Sutter

Munich Reprints in Economics from University of Munich, Department of Economics

Abstract: We study a fundamental conflict in economic decision-making, the trade-off between equality, equity and incentives, in a new experimental game that nests a voluntary contributions mechanism in a broader spectrum of incentive schemes. In a 2×2 design, we let subjects either vote on or exogenously encounter incentive settings while assigned unequal endowments are either task-determined or random. We find that earned endowments lead to less support for redistribution and less cooperation. Subjects' voting is influenced by egalitarian and equity concerns, in addition to self-interest. Cooperation rates respond rather continuously to incentives.

JEL-codes: C91 C92 D31 D63 H41 (search for similar items in EconPapers)
Date: 2013-05
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Citations: View citations in EconPapers (81)

Published in European Economic Review 60(2013-05): pp. 32-51

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Related works:
Journal Article: Equality, equity and incentives: An experiment (2013)
Working Paper: Equality, Equity and Incentives: An Experiment (2010)
Working Paper: Equality, Equity and Incentives: An Experiment (2010)
Working Paper: Equality, Equity and Incentives: An Experiment (2010)
Working Paper: Equality, equity, and incentives: An experiment (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:lmu:muenar:18172

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