The impact of (in)equality of opportunities on wealth distribution: evidence from ultimatum games
Grimalda, Gianluca, Kar, Anirban and Proto, Eugenio (2008) The impact of (in)equality of opportunities on wealth distribution: evidence from ultimatum games. Working Paper. Coventry: University of Warwick, Department of Economics. Warwick economic research papers (No.843).
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We study the impact on payoff distribution of varying the probability (opportunity) that a player has of becoming the proposer in an ultimatum game (UG). Subjects' assignment to roles within the UG was randomised before the interactions. Subjects played 20 rounds anonymously and with random rematching at each round. We compare the outcomes of four different settings that differed according to the distribution of opportunities between the pair of players in each round, and across the whole 20 rounds. The results clearly point to the existence of a discontinuity in the origin of the opportunity spectrum.Allowing a player a 1% probability of becoming the proposer brings about significantly lower offers and higher acceptance rates with respect to the benchmark case where a player has no such a chance. As such probability is raised to 20% and 50%, this same trend continues, but the effects are generally no longer significant with respect to the 1% setting. In one case the monotonic pattern is violated. We conclude that subjects in our experiment appear to be motivated mostly by the purely symbolic aspect of opportunity rather than by the actual fairness in the allocation of opportunities.
|Item Type:||Working or Discussion Paper (Working Paper)|
|Subjects:||H Social Sciences > HB Economic Theory|
|Divisions:||Faculty of Social Sciences > Economics|
|Library of Congress Subject Headings (LCSH):||Wealth -- Moral and ethical aspects, Distribution (Economic theory), Distributive justice, Game theory|
|Series Name:||Warwick economic research papers|
|Publisher:||University of Warwick, Department of Economics|
|Place of Publication:||Coventry|
|Official Date:||19 February 2008|
|Number of Pages:||39|
|Status:||Not Peer Reviewed|
|Access rights to Published version:||Open Access|
|Funder:||European Commission (EC), University of Warwick|
|Grant number:||N. 029093 (EC)|
 Alesina, A. & La Ferrara, E. 2005. 'Preferences for redistribution in the land of opportunities,' Journal of Public Economics, Elsevier, vol. 89(5-6), pages 897-931, June.
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