Inequality of Opportunity, Biased Beliefs, and Demand for Redistribution

Last registered on October 27, 2024
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Pre-Trial

Trial Information

General Information

Title
Inequality of Opportunity, Biased Beliefs, and Demand for Redistribution
RCT ID
AEARCTR-0008147
Initial registration date
September 28, 2021

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
October 01, 2021, 2:57 PM EDT

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

Last updated
October 27, 2024, 5:56 PM EDT

Last updated is the most recent time when changes to the trial's registration were published.

Locations

Country
United States of America
Region

Primary Investigator

Name
Marcel Preuss
Affiliation
Cornell University
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Other Primary Investigator(s)

PI Name
Germán Reyes
PI Affiliation
Cornell University
Contact Investigator
PI Name
Jason Somerville
PI Affiliation
Federal Reserve Bank of New York
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PI Name
Joy Wu
PI Affiliation
Ludwig-Maximilians-Universität München
Contact Investigator

Additional Trial Information

Status
Completed
Start date
2021-09-28
End date
2023-06-30
Keywords
Behavior, Lab, Labor, Welfare
Additional Keywords
inequality, redistribution, luck, effort, beliefs, fairness
JEL code(s)
D63, D81, D91, H23
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
A description of this study will be in fields that will not become public until the experiment has completed.
External Link(s)

Registration Citation

Citation
Preuss, Marcel et al. 2024. "Inequality of Opportunity, Biased Beliefs, and Demand for Redistribution." AEA RCT Registry. October 27. https://doi.org/10.1257/rct.8147-1.3
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
A description of this study will be in fields that will not become public until the experiment has completed.
Intervention (Hidden)
See the pre-analysis plan for more information.
Intervention Start Date
2021-09-28
Intervention End Date
2021-12-31

Primary Outcomes

Primary Outcomes (end points)
See the pre-analysis plan for more information.
Primary Outcomes (explanation)
See the pre-analysis plan for more information.

Secondary Outcomes

Secondary Outcomes (end points)
See the pre-analysis plan for more information.
Secondary Outcomes (explanation)
See the pre-analysis plan for more information.

Experimental Design

Experimental Design
A description of this study will be in fields that will not become public until the experiment has completed.
Experimental Design Details
Research has consistently found that people in many parts of the world are willing to tolerate wealth inequality when it is the outcome of personal choices and effort. On the other hand, people tend to support redistribution if luck is the source of inequality. In practice, luck and effort are often intertwined: luck begets effort and vice versa. This research project aims to explore how people's acceptance of inequality is shaped by how luck presents itself: (1) as an opportunity to demonstrate merit or (2) as a windfall gain independent from merit. The goal is to understand in which environments people accurately grasp the importance of luck in shaping outcomes, and what interventions lead to more precise beliefs. To study these questions, a novel online experiment is proposed to manipulate the dynamics of effort and luck, and to measure how the affected perceptions about the importance of luck versus effort shape demand for redistribution.

To shed light on why demand for redistribution has remained stagnant despite luck being increasingly important, we study redistributive preferences in the presence of inequalities of opportunities using an online experiment. Our experiment has two types of players---workers and spectators---and is divided into three stages: a production stage, an earnings stage, and a redistribution stage. Workers actively participate in the first two stages. In the production stage, workers engage in a real-effort task for a fixed amount of time. In the “luck as windfall gains” treatments, a coin flip decides whether performance or chance determine the winner. In the unequal opportunity treatments, we exogenously vary the rate of return or “multiplier” of each completed task across workers at the beginning of the experiment, thereby generating inequality of opportunities. The output of each worker is given by her number of completed tasks times her exogenous return to effort. In the earnings stage, workers are randomly matched in pairs and the worker with the highest output earns $X while the worker with the lowest output earns $Y. In the final redistribution stage, spectators---subjects who do not engage in the real-effort task---make earnings allocation decisions between players. Specifically, spectators decide whether and how much income to redistribute between the high-earnings worker and the low-earnings worker. In our baseline treatment cases, the spectators know which player won and the multipliers of each player (or the probability of a coin flip, respectively), but not the output nor the number of tasks completed by each worker.

Further details of our experimental design are provided in the pre-analysis doc.
Randomization Method
Randomization done by computer (oTree).
Randomization Unit
Individual
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
1200 individuals
Sample size: planned number of observations
1200 individuals
Sample size (or number of clusters) by treatment arms
See pre-analysis plan for more information.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
Cornell University Institutional Review Board for Human Participants
IRB Approval Date
2021-03-17
IRB Approval Number
2102010097
Analysis Plan

Analysis Plan Documents

Pre-Analysis Plan (September 2021)

MD5: 282beb7d48fe1be483ff482e4d1f6553

SHA1: 6db69e3430a5d30d76621628b05261c793c3b25f

Uploaded At: September 28, 2021

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials