Coordination via Redistribution

Andrea Martinangeli, Peter Martinsson and Amrish Patel

Working Papers from Max Planck Institute for Tax Law and Public Finance

Abstract: Can prior voluntary redistribution improve coordination? We theoretically show that distributive preferences, forward induction and signalling all imply that it can. We then experimentally test our predictions by allowing subjects to redistribute part of their endowment before playing a battle of the sexes game. To identify whether the redistribution option increases coordination, and why, we also run experiments with no redistribution and forced redistribution. Our results show that the redistribution option does indeed signiï¬ cantly increase coordination. Disentangling the reasons why, we ï¬ nd that behaviour is most consistent with distributive preferences and one-step of forward induction (rather than signalling or two-steps of forward induction).

Keywords: Coordination; redistribution; experiment; distributive preferences; forward induction; signalling altruism (search for similar items in EconPapers)
JEL-codes: C72 D02 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2017-07
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: Coordination via redistribution (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:mpi:wpaper:tax-mpg-rps-2017-07

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