Does Democracy Inevitably Lead to Aggressive Redistribution? A Family Perspective

Last registered on November 03, 2025

View Trial History

Pre-Trial

Trial Information

General Information

Title

Does Democracy Inevitably Lead to Aggressive Redistribution? A Family Perspective

RCT ID

AEARCTR-0017137

Initial registration date

October 29, 2025

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 03, 2025, 10:04 AM EST

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

Locations

Country

Hong Kong

Region

Hong Kong

Primary Investigator

Name

Simon Fan

Affiliation

Lingnan University

Contact Primary Investigator

Other Primary Investigator(s)

Additional Trial Information

Status

In development

Start date

2025-10-29

End date

2026-06-10

Keywords

Behavior, Education, Governance, Labor, Welfare

Additional Keywords

JEL code(s)

Secondary IDs

Prior work

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

Abstract

This paper explains why democracies marked by inequalities may not experience aggressive redistribution through the lens of parent-child interactions. Parental concerns about the negative impacts of high taxation on their children’s motivation to study and pursue high-paying careers deter the poor majority from harboring an inclination to expropriate the rich. We construct an overlapping generations model in which workers vote on the redistributive policy under majority rule, while considering the incentive costs that the policy imposes on their children. We analyze the stationary Markov perfect equilibrium where the likelihood that a moderate income tax can be credibly enforced increases with the degree of parental altruism. We will test the theoretical implications based on laboratory experiments.

External Link(s)

Registration Citation

Citation

Fan, Simon. 2025. "Does Democracy Inevitably Lead to Aggressive Redistribution? A Family Perspective." AEA RCT Registry. November 03. https://doi.org/10.1257/rct.17137-1.0

Sponsors & Partners

Experimental Details

Interventions

Intervention(s)

We will recruit students of a large Chinese university to participate in laboratory experiments.

Intervention Start Date

2025-12-16

Intervention End Date

2026-05-20

Primary Outcomes

Primary Outcomes (end points)

The primary focus of the experiments is to test whether, and how, one group (referred to as Group A) honoring its original agreement affects the behavior of the other group (referred to as Group B). If Group B’s actions impact Group A’s material benefits, then all members of Group A may choose to honor their original agreement (or deviate less from it) in order to induce Group B to take actions that benefit Group A. Most interestingly, this inducement for all members of Group A to honor their original agreement may encourage them to make high investments without worrying that their group mates will take their returns when they are successful, which ultimately leads to a significant increase in the welfare of all members of Group A.

Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)

Secondary Outcomes (explanation)

Experimental Design

There are multiple rounds in the game you are about to play. The system may randomly stop the game at any time. At the beginning of the experiment, 38 participants are randomly divided into two groups: Group A and Group B.

In each round, one group plays the game while the other group observes but does not participate. At the beginning of each round, every member of the group playing the game receives 100 Experimental Currency Units (ECU), which they can choose to either save or invest. The exchange rate is 20 ECU = 1 RMB.

Additionally, participants who choose to invest and become “successful” will receive an extra 400 ECU. The probability of becoming successful increases with the amount invested. Specifically, if a participant invests e, their probability of success is:
0.05√e
If a participant becomes successful, they receive a reward of 400 ECU. If they are not successful, they receive nothing for that investment.
Moreover — and perhaps more importantly — participants also receive a reward based on the number of successful players in the next round.
Each round of the game consists of five stages, which occur in sequence.

Experimental Design Details

Not available

Randomization Method

Randomization will be done in office by a computer. In the simplest experimental design, there are multiple rounds in the game you are about to play. The system may randomly stop the game at any time. At the beginning of the experiment, 38 participants are randomly divided into two groups: Group A and Group B.

In a more refined experimental design, we will recruit 45 students in each experimental group. There will be multiple rounds in the game you are about to play. The system may randomly stop the game at any time. At the beginning of the experiment, 45 participants are randomly divided into three groups: Group A, Group B and Group C. Then, the system will randomly re-divide the 45 students in three new groups after every 3 rounds of experiments.

Randomization Unit

Both (or three) groups and individuals.

Was the treatment clustered?

Yes