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Fairness in winner-take-all markets


Bartling, Björn; Cappelen, Alexander; Ekström, Mathias; Sørensen, Erik; Tungodden, Bertil (2018). Fairness in winner-take-all markets. Working paper series / Department of Economics 287, University of Zurich.

Abstract

The paper reports the first experimental study on people’s fairness views on extreme income inequalities arising from winner-take-all reward structures. We find that the majority of participants consider extreme income inequality generated in winner-take-all situations as fair, independent of the winning margin. Spectators appear to endorse a “factual merit” fairness argument for no redistribution: the winner deserves all the earnings because these earnings were determined by his or her performance. Our findings shed light on the present political debate on redistribution, by suggesting that people may object less to certain types of extreme income inequality than commonly assumed.

Abstract

The paper reports the first experimental study on people’s fairness views on extreme income inequalities arising from winner-take-all reward structures. We find that the majority of participants consider extreme income inequality generated in winner-take-all situations as fair, independent of the winning margin. Spectators appear to endorse a “factual merit” fairness argument for no redistribution: the winner deserves all the earnings because these earnings were determined by his or her performance. Our findings shed light on the present political debate on redistribution, by suggesting that people may object less to certain types of extreme income inequality than commonly assumed.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Working Paper Series > Department of Economics
Dewey Decimal Classification:330 Economics
JEL Classification:C91, D63
Uncontrolled Keywords:Winner-take-all reward structures, fairness, income inequality
Language:English
Date:May 2018
Deposited On:07 May 2018 08:55
Last Modified:31 Jul 2018 06:35
Series Name:Working paper series / Department of Economics
Number of Pages:31
ISSN:1664-7041
OA Status:Green
Official URL:http://www.econ.uzh.ch/static/wp/econwp287.pdf
Related URLs:http://www.econ.uzh.ch/static/workingpapers.php

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