Just Luck: An Experimental Study of Risk-Taking and Fairness
Alexander W. Cappelen, James Konow, Erik Ø. Sørensen, Bertil Tungodden
American Economic Review · 2013 · Volume 103 · Issue 4
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.
Keywords
Equity, Justice, Inequality, and Other Normative Criteria and Measurement, Criteria for Decision-Making under Risk and Uncertainty, Taxation and Subsidies: Externalities, Redistributive Effects, Environmental Taxes and Subsidies
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