LiU Working Papers in Economics
Are Individuals Luck Egalitarians?: An Experiment on the Influence of Brute and Option Luck on Social Preferences
() and David Andersson
Abstract: 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
A two-stage experimental design with real incentives was
employed. In total, 226 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). 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, 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.
Individuals change their action associated with
re-allocation depending on the underlying conception of luck. Subjects in
the brute luck treatment equalized outcomes to larger extent (p=0.0069).
Thus, subjects redistributed a larger amount to unlucky losers and a
smaller amount to lucky winners compared to equivalent choices made in the
option luck treatment.
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.
Keywords: fairness; luck egalitarianism; brute luck; option luck; dictator game; laboratory experiment; (follow links to similar papers)
JEL-Codes: D03; (follow links to similar papers)
19 pages, February 19, 2016
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