It is Hobbes, not Rousseau: an experiment on voting and redistribution

Abstract

We perform an experiment which provides a laboratory replica of some important features of the welfare state. In the experiment, all individuals in a group decide whether to make a costly effort, which produces a random (independent) outcome for each one of them. The group members then vote on whether to redistribute the resulting and commonly known total sum of earnings equally amongst themselves. This game has two equilibria, if played once. In one of them, all players make effort and there is little redistribution. In the other one, there is no effort and nothing to redistribute. A solution to the repeated game allows for redistribution and high effort, sustained by the threat to revert to the worst of these equilibria. Our results show that redistribution with high effort is not sustainable. The main reason for the absence of redistribution is that rich agents do not act differently depending on whether the poor have worked hard or not. The equilibrium in which redistribution may be sustained by the threat of punishing the poor if they do not exert effort is not observed in the experiment. Thus, the explanation of the behavior of the subjects lies in Hobbes, not in Rousseau.

Political self-serving bias and redistribution

“…While these studies typically measure preferences for redistribution before the realization of income, Frohlich & Oppenheimer (1990), Cabrales et al (2012), Cappelen et al (2007), and Großer & Reuben (2013) investigate preferences for redistribution contingent on economic experience. Close to our work is Kataria & Montinari (2012), who report results from an unequal opportunity treatment, where participants earn a payoff which partly depends on luck and partly on effort.…”

Inequality aversion and voting on redistribution

“…The rich have higher maximum payoffs than the poor (200 vs. 92) and have higher payoffs at all redistribution levels except for the maximum redistribution level which equalizes incomes (payoff of 27 each). Note that payoffs are common information and there is no uncertainty over one's (future) income position such that voting does not take place behind a “veil of ignorance” (see Cabrales et al (2012) for an experimental study of social insurance).…”

Dependency Status and Demand for Social Insurance: Evidence from Experiments and Surveys

“…Separating insurance effects (desire to insure against bad states) from redistributive concerns (desire to equalize relative outcomes across individuals or groups) is a key technical challenge. Most of the experimental literature examines voting in groups over explicitly redistributive policies (Agranov and Palfrey, 2014;Cabrales et al, 2012;Rutstrom and Williams, 2000).…”