In search of unanimously preferred income distributions. Evidence from a choice experiment

Sophie Cetre (1) , Max Lobeck (2) , Claudia Senik (2, 3, 4) , Thierry Verdier (2, 3)

1 Sciences Po - Sciences Po
2 PSE - Paris School of Economics
3 PJSE - Paris Jourdan Sciences Economiques
4 UP4 - Université Paris-Sorbonne

Using a choice-experiment in the lab, we look at preferences over pairs of income distributions within small groups in a firm-like setting. Is one type of distribution capable of attracting votes unanimously? It turns out that Pareto-dominance is the most important choice criterion: in binary choices over two distributions, all subjects prefer larger inequality when it makes everyone weakly better off. This is true,no matter whether income distribution is based on merit or luck. Unanimity only breaks once subjects’ positions within the income distribution are fixed and known ex-ante. However, even then, 75% subjects prefer Pareto-dominant distributions. This suggests that efficiency motives are of primary importance, more so than the origin of inequality.

Mots clés: Distributive preferences; Inequality; Choice experiment

Domaines: Economies et finances

Sophie Cetre, Max Lobeck, Claudia Senik, Thierry Verdier. In search of unanimously preferred income distributions. Evidence from a choice experiment. 2018. ⟨halshs-01863359⟩