Information Effect Regarding Inequality of Opportunities on Redistribution: A Lab Experiment

This paper presents evidence from a laboratory experiment regarding the effect of information about opportunities and effort in redistributive behavior. In the experiment, individuals are randomly selected into one of two groups, each endowed with differing probabilities of earning $20. By exerting effort, individuals increase their probabilities of earning the $20 but conditional on effort the difference in probabilities remain constant so groups are determining opportunities. After initial earnings are determined, I examine redistribution using a dictator game where the dictator earned $20 and the receiver earned $0. Treatments vary the level of inequality of opportunities and information regarding receivers' opportunities and effort. I find dictators consistently rewarding receivers' high effort. However, dictators do not consider receiver's opportunities nor their own opportunities when redistributing.