Excuses and Redistribution

Title: Excuses and Redistribution

Speaker: Bea Ahumada (University of Pittsburg)

Abstract: This study explores how belief distortion in the context of income inequality – particularly when inequality is perceived to arise from both effort and luck- influences attitudes toward income redistribution and acceptance of inequality. In a controlled laboratory setting involving a real-effort task, participants make redistribution decisions between themselves and a partner. The study varied the information provided to participants regarding the role of effort and luck in determining earnings pre-redistribution. Results from belief elicitation indicate that participants were more likely to attribute their partners’ success to luck rather than effort. Furthermore, the use of excuses (attributing outcomes to luck) was found to significantly reduce willingness to redistribute earnings to their partners and to increase the levels of inequality implemented after the redistribution. These findings highlight how belief distortions can influence social preferences regarding redistribution and may contribute to the persistence of inequality despite prevalent meritocratic principles.