Mollerstrom Paper on Luck, Inequality, and Fairness Published in “Journal of Public Economics”

News | October 14, 2015

Assistant Professor of Economics and ICES faculty member Johanna Mollerstrom has a new paper in the latest issue of the Journal of Public Economics.

The article, “Luck, Choice and Responsibility: An Experimental Study of Fairness Views,” was co-authored with Bjørn-Atle Reme and Erik Ø. Sørensen.

Abstract

We conduct laboratory experiments where third-party spectators have the opportunity to redistribute resources between two agents, thereby eliminating inequality and offsetting the consequences of controllable and uncontrollable luck. Some spectators go to the limits and equalize either all or no inequalities, but many follow an interior allocation rule. These interior allocators regard an agent’s choices as more important than the cause of her low income and do not always compensate bad uncontrollable luck. Instead, they condition such compensation on the agent’s decision regarding controllable luck exposure, even though the two types of luck are independent. This allocation rule is previously unaccounted for by the fairness views in the literature. Moreover, its policy implications are fundamentally different in that it extends individual responsibility for choices made to also apply to areas that were not affected by these choices.

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