Scandinavian Working Papers in Economics
Discussion Paper Series in Economics,
Norwegian School of Economics, Department of Economics
No 9/2024: Fairness Preferences and Default Effects
Justin Valasek (), Pauline Vorjohann () and Weijia Wang ()
Additional contact information
Justin Valasek: Dept. of Economics, Norwegian School of Economics and Business Administration, Postal: NHH, Department of Economics, Helleveien 30, N-5045 Bergen, Norway
Pauline Vorjohann: University of Exeter Business School, Postal: The University of Exeter , Rennes Drive, Exeter, EX4 4ST , UK
Weijia Wang: Dept. of Economics, Norwegian School of Economics and Business Administration, Postal: NHH, Department of Economics, Helleveien 30, N-5045 Bergen, Norway
Abstract: An influential subset of the literature on distributional preferences studies how preferences condition on characteristics such as workers' relative productivity. In this study we establish that there are default effects when such conditional fairness preferences are measured using the "inequality acceptance" method. Depending on the default, implemented inequality decreases by over 65% and cross-country differences are not observed. To organize the data, we develop a simple framework in which agents form a reference point based on a combination of the distribution suggested by their fairness ideal and the default. We use this framework to illustrate that choice data from different defaults is needed to separately identify the fairness ideal and effect of the default, and discuss best practices for measuring fairness preferences.
Keywords: inequality; fairness; inequality acceptance; default effects; experiment
Language: English
32 pages, June 4, 2024
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