Just Luck: An Experimental Study of Risk-Taking and Fairness
- (pp. 1398-1413)
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 risktaking, 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.Citation
Cappelen, Alexander W., James Konow, Erik Ø. Sørensen, and Bertil Tungodden. 2013. "Just Luck: An Experimental Study of Risk-Taking and Fairness." American Economic Review, 103 (4): 1398-1413. DOI: 10.1257/aer.103.4.1398Additional Materials
JEL Classification
- D63 Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- D81 Criteria for Decision-Making under Risk and Uncertainty
- H23 Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies