Choosing inequality: An experimental analysis of the impact of social immobility on the democratic election of distribution rules

Stephan Wolf and Alexander Lenger

No 02-2013, The Constitutional Economics Network Working Papers from University of Freiburg, Department of Economic Policy and Constitutional Economic Theory

Abstract: Mainstream economists usually identify a fundamental conflict between efficiency and justice in re-source allocation: markets are generally considered an efficient allocation tool, but create unequal results. Corresponding governmental redistribution shall equalize some of these market results, but leads to inefficiency due to disincentives both for net payers and net receivers. Consequently, this pa-per analyses the impact of social inequality on distributive choices in an experimental democracy. In our experiment, we find that stark inequality is generally accepted provided a strong egalitarian in-come floor is ensured. Even though our samples showed a very strong egalitarian inclination, complete egalitarianism was not a stable outcome. Some degree of differentiation always emerged on an initial egalitarian base.

Date: 2013
New Economics Papers: this item is included in nep-cdm, nep-exp and nep-gth
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