Redistribution beyond equality and status quo - heterogeneous societies in the lab

Urs Fischbacher, David Grammling and Jan Hausfeld

No 123, TWI Research Paper Series from Thurgauer Wirtschaftsinstitut, Universität Konstanz

Abstract: Selfishness and fairness are important drivers of redistribution, but recently an additional motive got into focus. In heterogeneous societies, ingroup preferences can be an important determinant of redistribution decisions. In a laboratory experiment, we investigate the relative importance of the different motives. We create heterogeneity by providing subjects with information about a social group of recipients (nationality, minimal or political orientation), we manipulate how initial inequality is generated (earned, random or unfair) and the shape of the distribution. Further, we extend the redistribution mechanism to go beyond the limits of status quo and equality. We find ingroup favoritism to be the strongest motive; decision-makers almost exclusively use extreme forms of redistribution to favor members of their own social group. We complement the behavioral data with eye-tracking data, showing that attention to the social group information and to poor outliers are indicative of redistribution.

Keywords: income redistribution; group bias; social preferences; political economy; processing (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:twi:respas:0123

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