Scandinavian Working Papers in Economics

Discussion Paper Series in Economics,
Norwegian School of Economics, Department of Economics

No 8/2018: Fairness in Winner-Take-All Markets.

Björn Bartling (), Alexander W. Cappelen (), Mathias Ekström (), Erik Ø. Sørensen () and Bertil Tungodden ()
Additional contact information
Björn Bartling: University of Zurich, Postal: University of Zurich, Department of Economics, Blümlisalpstrasse 10, Room BLU-210, 8006 Zurich
Alexander W. Cappelen: Dept. of Economics, Norwegian School of Economics and Business Administration, Postal: NHH , Department of Economics, Helleveien 30, N-5045 Bergen, Norway
Mathias Ekström: Dept. of Economics, Norwegian School of Economics and Business Administration, Postal: NHH , Department of Economics, Helleveien 30, N-5045 Bergen, Norway
Erik Ø. Sørensen: Dept. of Economics, Norwegian School of Economics and Business Administration, Postal: NHH , Department of Economics, Helleveien 30, N-5045 Bergen, Norway
Bertil Tungodden: Dept. of Economics, Norwegian School of Economics and Business Administration, Postal: NHH , Department of Economics, Helleveien 30, N-5045 Bergen, Norway

Abstract: The paper reports the first experimental study on people’s fairness views on extreme Income inequalities arising from winner-take-all reward structures. We find that the majority of participants consider extreme income inequality generated in winner-take-all situations as fair, independent of the winning margin. Spectators appear to endorse a “factual merit” fairness argument for no redistribution: the winner deserves all the earnings because these earnings were determined by his or her performance. Our findings shed light on the present political debate on redistribution, by suggesting that people may object less to certain types of extreme income inequality than commonly assumed.

Keywords: Winner-take-all reward structures; fairness; income inequality

JEL-codes: C91; D63

31 pages, April 30, 2018

Full text files

DP%2008.pdf?sequence=1&isAllowed=y PDF-file Full text

Download statistics

Questions (including download problems) about the papers in this series should be directed to Dagny Hanne Kristiansen ()
Report other problems with accessing this service to Sune Karlsson ().

This page generated on 2018-05-08 10:18:53.