Drouvelis, Michalis, and Ernesto María Gavassa Pérez. Working Paper. “Redistribution Over Gains and Losses: Social Preferences and Moral Rules.”
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Abstract
We investigate redistributive behavior over gains and losses. Using two pre-registered experiments, we document a systematic asymme- try in behavior: people are more selfish when redistributing over losses than over equivalent gains. We use structural estimation methods and out-of-sample predictions to understand the drivers of choices made by experimental subjects, and identify that a mix of social preferences coupled with loss aversion (inequality aversion, social efficiency, and maximin) alongside moral rules (blame avoidance and praise seeking) are key to understand the individual heterogeneity of redistributive behavior.