Template-Type: ReDIF-Paper 1.0
Title: (Not) Everyone Can Be a Winner - The Role of Payoff Interdependence for Redistribution
Author-Name: Sebastian Schaube
Author-Email: sebastian.schaube@uni-bonn.de
Author-Name: Louis Strang
Author-Email: lstrang@uni-bonn.de
Classification-JEL:  C91, D31, D63, H23
Keywords: Redistribution, Social preferences, Fairness, Lab experiment

Abstract: How does payoff interdependence affect preferences for redistribution? We experimentally implement a zero-sum setting and one in which everyone can be simultaneously successful. Across these, we compare redistribution given an identical level of inequality. First, two subjects’ performances in a real-effort task translate into chances of winning a prize. Across treatments, we vary the interdependence of payoffs: either there is only a single prize or both subjects can potentially win a prize at the same time. Afterwards, a spectator can redistribute the prize money. If payoffs are not directly interdependent, the average amount redistributed decreases by 14-22%. In additional treatments, solely performance determines the prize allocation. Nevertheless, the impact of payoff interdependence remains unchanged. Comparing the settings with and without randomness, we find that its mere presence increases redistribution, even though there is no uncertainty about the (relative) performance of the two subjects.

Note: 
Length: 34
Creation-Date: 2019-06
Revision-Date: 
File-URL: https://www.crctr224.de/research/discussion-papers/archive/dp097
File-Format: application/pdf
Handle: RePEc:bon:boncrc:CRCTR224_2019_097