We use a model of self-centered inequality aversion suggested by Fehr and Schmidt (1999) to study voting on redistribution. We theoretically identify two classes of conditions when an empirically plausible amount of fairness preferences induces redistribution through referenda. We test the predictions of the adapted inequality aversion model in a simple redistribution experiment, and find that it predicts voting outcomes far better than the standard model of voting assuming rationality and strict self-interest.

This paper discusses what determines the preferences of individuals for redistribution. We review the theoretical literature and provide a framework to incorporate various effects previously studied separately in the literature. We then examine empirical evidence for the US, using the General Social Survey, and for a large set of countries, using the World Values Survey. The paper reviews previously found results and provides several new ones. We emphasize, in particular, the role of historical experiences, cultural factors and personal history as determinants of preferences for equality or tolerance for inequality.

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Abstract. Behavior inconsistent with self-interest has been observed in many contexts. We argue that models designed to cope with these anomalies are inadequate to deal with a variety of social values. Our extension of the Fehr & Schmidt ‘inequity aversion ’ model is applied to results from dictator experiments in which the money to be divided is generated by the efforts of paired individuals in either one or two rooms. This production leads to sharing behavior qualitatively different from that found in other dictator experiments. The pattern of sharing can be explained by entitlements, equity, and the credibility of the experiment. 1.

At the heart of modern optimal tax research is the assumption that the objective of taxation is Utilitarian. I present new survey evidence that most people disagree with this assumption, preferring tax policies based at least in part on a classic alternative objective: the principle of Equal Sacrifice. I generalize the standard model to accommodate this preference for a mixed objective. Then, I show that optimal policy in this generalized model, calibrated to the survey evidence, quantitatively matches several features of existing tax policy that are incompatible in the conventional model but widely endorsed in reality, including the coexistence of substantial redistribution and limited tagging. Additional implications increase the appeal of these steps toward a positive theory of optimal taxation.

I wish to thank Vincent Ostrom and my many colleagues at the Workshop who have worked with me throughout the years to develop the research program that is briefly discussed herein. I appreciate the helpful suggestions given me by Arun Agrawal, Andreas Leibbrant, Mike McGinnis, Jimmy Walker, Tom Wisdom, and by the Applied Theory Working Group and the Experimental Reading Group, and the excellent editing skills of Patty Lezotte. Essential support received over the years from the Ford

Problems of the commons exist in a wide variety of settings ranging in size and complexity from the family (e.g., the household budget and the kitchen sink) to the global scale (e.g., loss of biodiversity and global warming). Game theory is a useful theoretical tool for representing a simplified, core social dilemma facing a set of individuals sharing a commons. Game theorists, who assume that individuals base decisions on immediate returns to self, frequently use the Prisoners ’ Dilemma game to represent the problem of the commons (Alcock and Mansell 1977; Richards 2001; but see Cole and Grossman 2008). The individuals in such a game are assumed to have complete information about the strategy space they face and the outcomes that will be obtained depending on their own and others ’ actions. On the other hand, the pure theory is about individuals who do not know one another, do not share a common history, and cannot communicate with one another. In this model, game theory predicts that individuals jointly using a commons will overharvest, leading to Hardin’s (1968) “Tragedy of the Commons.” An important asset of game theory is that it provides a clear theoretical prediction that

Various forms of analysis are used to evaluate public-policy options. In many cases, such as risk reduction or preservation of the natural environment, part of the input involves the personal value of outcomes to people, in ways that cannot easily be captured by the assignment of monetary values. The analysis requires judgments from respondents to surveys. One method is “contingent valuation ” (CV) in which the respondents are asked how much money they would be willing to pay for some public good (such as reduction in the risks of arsenic pollution). Another method is “conjoint analysis ” in which each respondent rates a series of options differing in a few attributes (such as cost and amount of pollution reduction). These methods, and others, have serious flaws. For example, CV yields judgments that are usually not sufficiently sensitive to the amount of the good (e.g., magnitude of pollution reduction). Conjoint analysis solves this problem, but it seem to lead to underestimation of the weights of the less important attributes because people attend only to the most important one. The proposed research will explore the nature of these problems and several promising approaches to correcting them. For example, CV may be improved by asking for judgments of both dimensions (magnitude of the good and the amount that it would be worth paying for that magnitude). Conjoint analysis

This paper proposes an alternative approach to addressing the complex problems of climate change caused by greenhouse gas emissions. The author, who won the 2009 Nobel Prize in Economic Sciences, argues that single policies adopted only at a global scale are unlikely to generate sufficient trust among citizens and firms so that collective action can take place in a comprehensive and transparent manner that will effectively reduce global warming. Furthermore, simply recommending a single governmental unit to solve global collective action problems is inherently weak because of freerider problems. For example, the Carbon Development Mechanism (CDM) can be ‘gamed ’ in ways that hike up prices of natural resources and in some cases can lead to further natural resource exploitation. Some flaws are also noticeable in the Reducing Emissions from

In two experiments, participants judged the fairness of different distributions of wealth in hypothetical societies. In the first study, the level of meritocracy in the hypothetical societies and the frame of reference from which participants judged alternative distributions of wealth interacted to influence fairness judgments. As meritocracy increased, all participants became more tolerant of economic inequality, particularly when they judged fairness from a redistribution frame of reference that made salient transfers among socioeconomic classes. Liberal participants, however, placed a greater emphasis on equality than did conservative participants across all conditions. In the second study, reactions to income transfers depended on the efficiency of the transfers and the identity of the groups receiving the benefits, but conservatives placed a greater emphasis in their fairness judgments on tying benefits to workfare requirements, whereas liberals did not distinguish between unconditional welfare transfers and workfare transfers. KEY WORDS: social justice, impartial-reasoning device, frame of reference, meritocracy, efficiency, workfare, hypothetical societies paradigm Public debate about the proper role of government in maintaining or altering the distribution of wealth often involves arguments about highly charged “matters of fact, ” such as whether the poor are responsible for their own fate and whether