Work

Just Luck: An Experimental Study of Risk-Taking and Fairness

Year: 2013

Type: article

Abstract: Choices involving risk significantly affect the distribution of income and wealth in society. This paper reports the results of the first experiment, to our knowledge, to study fairness views about risk-taking, specifically whether such views are based chiefly on ex ante opportunities or on ex post outcomes. We find that, even though many participants focus exclusively on ex ante opportunities, most favor some redistribution ex post. Many participants also make a distinction between ex post inequalities that reflect differences in luck and ex post inequalities that reflect differences in choices. These findings apply to both stakeholders and impartial spectators. (JEL D63, D81, H23)

Source: American Economic Review

DOI: 10.1257/aer.103.4.1398

Authors: Alexander W Cappelen, James Konow, Erik Ø Sørensen, Bertil Tungodden

Institutions: Norwegian School of Economics, Kiel Institute for the World Economy, Christian-Albrechts-Universität zu Kiel, Loyola Marymount University

Language: English

Topic: Experimental Behavioral Economics Studies

Subfield: Safety Research

Field: Social Sciences

Domain: Social Sciences

SDGs: Reduced inequalities, No poverty

Open Access status: green

Funders: Universitetet i Oslo, Norges Forskningsråd