Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/36296
Authors: 
Großer, Jens
Reuben, Ernesto
Year of Publication: 
2009
Series/Report no.: 
IZA Discussion Papers 4549
Abstract: 
We study the interaction between competitive markets that produce large but unequally distributed welfare gains and elections through which the poor majority can redistribute income away from the rich minority. In our simple laboratory democracy, subjects first earn their income by trading in a double auction market and thereafter vote on redistributive policies in two-candidate elections. In addition, in one of the treatments subjects can attempt to influence the candidates' policy choices by transferring money to them. We observe very high levels of redistribution - even when transfers to candidates are possible - with little effect on market efficiency. Overall, the experimental results are explained by our equilibrium predictions.
Subjects: 
Redistribution
double auction
elections
lobbying
JEL: 
H23
D41
D72
D73
Document Type: 
Working Paper

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