Overconfidence behind the veil of ignorance: inequality, motivated beliefs, and redistribution

Last registered on November 19, 2024

View Trial History

Pre-Trial

Trial Information

General Information

Title

Overconfidence behind the veil of ignorance: inequality, motivated beliefs, and redistribution

RCT ID

AEARCTR-0014848

Initial registration date

November 18, 2024

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published

November 19, 2024, 3:57 PM EST

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Country

Germany

Region

Primary Investigator

Name

Julia Baumann

Affiliation

Humboldt-Universität zu Berlin

Contact Primary Investigator

Other Primary Investigator(s)

PI Name

Yiming Liu

PI Affiliation

WZB Berlin, Humboldt-Universität zu Berlin

Contact Investigator

Additional Trial Information

Status

In development

Start date

2024-11-18

End date

2024-11-21

Keywords

Behavior

Additional Keywords

inequality acceptance, motivated beliefs, overconfidence

JEL code(s)

D31, D63, D83, H24

Secondary IDs

Prior work

This trial does not extend or rely on any prior RCTs.

Abstract

Societies exhibit persistent disparities in inequality levels and redistributive preferences, often accompanied by widely varying beliefs about social mobility that diverge from actual mobility rates. This study investigates the causal relationship between initial economic conditions, beliefs about social mobility, and redistributive choices. We conduct an online experiment where participants are randomly assigned to societies with different levels of initial inequality. They then form beliefs about their chances of being at the top of the income distribution and make consequential decisions about income allocation.

External Link(s)

Registration Citation

Citation

Baumann, Julia and Yiming Liu. 2024. "Overconfidence behind the veil of ignorance: inequality, motivated beliefs, and redistribution." AEA RCT Registry. November 19. https://doi.org/10.1257/rct.14848-1.0

Sponsors & Partners

Experimental Details

Interventions

Intervention(s)

Intervention (Hidden)

Intervention Start Date

2024-11-18

Intervention End Date

2024-11-21

Primary Outcomes

Primary Outcomes (end points)

confidence about relative performance in a group; inequality acceptance

Primary Outcomes (explanation)

See PAP

Secondary Outcomes

Secondary Outcomes (end points)

Secondary Outcomes (explanation)

Experimental Design

In groups of five, participants can become either high or low earners depending on luck and relative performance in a quiz. We assign either low or high Period 1 group inequality to induce motivated beliefs about becoming a high earner in the group. Subsequently, Period 2 inequality can be chosen by participants, where the motivated beliefs from Period 1 are expected to have a lasting effect on inequality acceptance.
In the Baseline treatment, participants receive no feedback about their quiz performance. In the Feedback treatment, participants receive information about their chances of becoming a high earner in their group. (See PAP for further details.)

Experimental Design Details

Randomization Method

randomization done by a computer

Randomization Unit

individual

Was the treatment clustered?

Experiment Characteristics

Sample size: planned number of clusters

1,200

Sample size: planned number of observations

1,200

Sample size (or number of clusters) by treatment arms

800 Baseline treatment, of which 400 High-inequality and 400 Low-inequality;
400 Feedback treatment, of which 200 High-inequality and 200 Low-inequality

Minimum detectable effect size for main outcomes (accounting for sample design and clustering)

see PAP

Supporting Documents and Materials

IRB