Fairness in Winner-Take-All Markets

By Frid Helen Olsen Hop

5 June 2018 12:41

Fairness in Winner-Take-All Markets

New working paper "Fairness in Winner-Take-All Markets" from Björn Bartling, Alexander W. Cappelen, Mathias Ekström, Erik Ø. Sørensen and Bertil Tungodden.

Abstract from the working paper

The paper reports the first experimental study on people’s fairness views on extreme in- come inequalities arising from winner-take-all reward structures. We find that the majority of participants consider extreme income inequality generated in winner-take-all situations as fair, independent of the winning margin. Spectators appear to endorse a “factual merit” fairness argument for no redistribution: the winner deserves all the earnings because these earnings were determined by his or her performance. Our findings shed light on the present political debate on redistribution, by suggesting that people may object less to certain types of extreme income inequality than commonly assumed.


Fairness and the proportionality principle

How should you distribute income so that you keep the fair inequalities (that derive from the freedom to choose), but not the unfair inequalities (that dervie from difference in opportunities)? Cappelen and Tungodden writes in Social Choice and Welfare.

Read the working paper

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