Experimental Economics and Game Theory Seminar for February 15

Events, Seminars | February 7, 2019

Join us for the ICES Seminar in Experimental Economics and Game Theory of the Spring 2019 semester, featuring Johanna Mollerstrom.

Prof. Mollerstrom, of George Mason University, will discuss her paper A Meritocratic Origin of Egalitarian Behavior (Abstract). The talk will take place on Friday, February 15th, from 4:00 to 5:00pm in room 5183 of Vernon Smith Hall, Arlington campus.
Visit the Seminar schedule to access the paper and to learn more about upcoming speakers.

Abstract

The meritocratic fairness ideal implies that inequalities in earnings are regarded as fair when they reflect differences in performance, but not when they reflect differences in luck. Implementation of the meritocratic fairness ideal requires complete information about individual performances however, and such information is often unavailable. We study inequality acceptance in the common, but previously under-studied, situation where there is uncertainty about whether inequality is reflecting performance or luck. We show theoretically that meritocrats in such situations can become more egalitarian in their behavior, and that the degree to which this happens will depend on how they trade off the possibility of the two mistakes that can be made when redistributing under uncertainty. The first mistake implies eliminating inequalities that actually reflect differences in performance, and the second mistake is that of accepting inequalities that reflect luck. A laboratory experiment shows, in line with our model, that uncertainty about the source of inequality provides a strong egalitarian pull on the behavior of meritocrats. In addition, the external validity of our framework, and the results from the laboratory, are confirmed in two large-scale surveys conducted on representative samples of the American and the Norwegian populations.

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