Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/54738 
Year of Publication: 
2011
Series/Report no.: 
Discussion Paper No. 310
Publisher: 
European University Viadrina, Department of Business Administration and Economics, Frankfurt (Oder)
Abstract: 
Most incomes underlie some risk, i.e. ex ante they can be regarded as a lottery ticket. In every society, the lucky winners of this lottery compensate unlucky losers (unemployed workers or bankrupt entrepreneurs) privately and/or by public insurances. Do voluntary solidarity payments depend on the amount and origin of risk of winners and losers? We differentiate between people with riskless incomes (civil servants), with low risk incomes (workers), and with high risk incomes (entrepreneurs). Some of our subjects had no choice of their risk class (civil servants and some workers), some of them had the choice to be a worker or an entrepreneur. The main stylized results are: (i) Civil servants and lucky workers with and without a choice transfer similar shares of their income to unlucky workers, but (ii) discriminate against unlucky entrepreneurs. (iii) Lucky entrepreneurs give about the same share of their income to unlucky workers as lucky workers do and (iv) do not significantly discriminate. (v) The potential solidarity payments are not an incentive for taking higher risks.
Subjects: 
solidarity
responsibility
risk taking
JEL: 
D63
D64
Document Type: 
Working Paper

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