Scandinavian Working Papers in Economics
Discussion Paper Series in Economics,
Norwegian School of Economics, Department of Economics
No 7/2022: Fairness and limited information: Are people Bayesian meritocrats?
Alexander Cappelen (), Thomas de Haan and Bertil Tungodden ()
Additional contact information
Alexander Cappelen: Dept. of Economics, Norwegian School of Economics and Business Administration, Postal: NHH, Department of Economics, Helleveien 30, N-5045 Bergen, Norway
Thomas de Haan: University of Bergen
Bertil Tungodden: Dept. of Economics, Norwegian School of Economics and Business Administration, Postal: NHH, Department of Economics, Helleveien 30, N-5045 Bergen, Norway
Abstract: Meritocracy is a prominent fairness view in many societies, but often difficult to apply because there is limited information about the source of inequality. This paper studies theoretically and empirically how limited information affects inequality acceptance. We connect the literatures on fairness and belief updating and show that irrationality in belief updating is potentially as important as differences in fairness views in explaining inequality acceptance. In many economic environments with limited information, signal-neglecting meritocrats act as egalitarians and base-rate neglecting meritocrats act as libertarians. The findings contribute to better understanding of the foundations of inequality acceptance in society.
Keywords: Fairness; Meritocracy
JEL-codes: D63
Language: English
65 pages, May 23, 2022
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