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Are Individuals Luck Egalitarians? – An experiment on the influence of brute and option luck on social preferences
Linköping University, Department of Management and Engineering, Economics. Linköping University, Department of Medical and Health Sciences, Health and Society. Linköping University, The Institute of Technology. (Beteende- och Neuroekonomi)ORCID iD: 0000-0002-8159-1249
2012 (English)Conference paper (Other academic)
Abstract [en]

Background / Objectives

According to luck egalitarianism, inequalities should be deemed fair as long as they follow from individuals’ deliberate and fully informed choices, i.e. option luck – while inequalities should be deemed unfair if they follow from choices over which the individual has no control, i.e. brute luck. This study investigates if individuals’ fairness preferences correspond with the luck egalitarian fairness position. More specifically, in a laboratory experiment we test how individuals choose to redistribute gains and losses that stem from option luck compared to brute luck.

Methods / Design

A two-stage experimental design was employed. In total, 125 subjects were randomly assigned to either the brute luck or option luck treatment. Treatments were identical except for how monetary compensation for participation in the experiment was settled in stage one. In the option luck treatment, subjects were given the option to chose between a safe option (50 Sek) and a risky option (a 50/50 gamble between 0 SEK and 150 SEK) for how they would be compensated for participating in the experiment. In the brute luck treatment no such choice was given, instead  all subjects were compensated based on outcome of the risky option. In the second stage, before winners and losers of the gamble were revealed, subjects were asked to distribute additional endowments (100 SEK) in an anonymous dictator game using the strategy method, i.e. making decisions contingent on the recipient losing or wining in the gamble.

Results / Findings

The average redistribution rate to losers was significantly higher in the brute luck treatment (48% of own endowment) compared to the option luck treatment (38%), suggesting that individuals have stronger preferences for redistribution toward individuals who suffer bad brute luck compared to individuals who suffer from equally bad outcomes due to bad option luck.

Conclusions / Implications

We find strong support for people having a fairness preference not just for outcomes, but also for how those outcomes are reached. Our findings are potentially important for understanding the role citizens assign individual responsibility for life outcomes, i.e. health and wealth. 

Place, publisher, year, edition, pages
National Category
URN: urn:nbn:se:liu:diva-84318OAI: diva2:558697
Priorities 2012: The 9th International Conference on Priorities in Health Care, 16-19 September, Vancouver, British Columbia
Available from: 2012-10-04 Created: 2012-10-04 Last updated: 2016-02-19Bibliographically approved

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