Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/306553 
Year of Publication: 
2024
Series/Report no.: 
Working Paper No. 287
Version Description: 
Revised version, August 2024
Publisher: 
University of Zurich, Department of Economics, Zurich
Abstract: 
Negative externalities, social and environmental responsibility, income effects, market experimentsThis paper reports the results of a large-scale incentivized experiment investigating individuals' fairness perceptions of the extreme income inequalities generated in winner-take-all competitions. We find that extreme income inequality in winner-take-all competitions is commonly accepted in our sample of 4,000 participants from the general population of the U.S., even when the winner outperforms the runner-up by the smallest possible margin. Generally, fairness judgements are only weakly influenced by the winning margin, which reveals that the mere fact of winning-be it by a tiny margin or by a substantial gap-justifies resulting inequalities. Our results improve understanding of public attitudes toward fairness and redistributive policies in winner-take-all competitions marked by extreme income inequalities.
Subjects: 
Winner-take-all competitions
winning margin
merit
fairness
income inequality
redistributive policies
JEL: 
C91
D31
D63
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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