Decentralization and the Fate of Minorities

This paper analyses the welfare effects of a change from centralized to decentralized political authority. The potential disadvantage with decentralization in our model is that local dominant groups with rather “extreme” preferences may win the vote and implement policies that harm the well-being of local minorities. When the national median voter represents a “moderate” position, centralization can be seen as a way of protecting the interests of local minorities. Our main result is that the centralized solution may welfare dominate decentralization even in the absence of scale economics and interregional spillovers. We also demonstrate that increased segregation, increased mobility, and increased heterogeneity in preferences, factors that are normally considered to be arguments in favor of decentralization, may reduce the attractiveness of the decentralized solution from a welfare perspective. Finally, we show that when the national median voter is an “extreme” type, decentralization may represent a way of protecting local minority interests.

Two approaches to stakeholder identification

The paper presents two fundamentally different ways to approach the identification of stakeholders. The first is the relationship approach. According to this approach, special obligations arise between individuals or groups only if a specific relationship exists between them. The rival approach is the assignment approach. This approach challenges the claim that obligations only arise if a particular relationship exists between the company and a group. It holds that the distribution of responsibilities should be viewed as a set of pragmatic rules derived from general moral considerations. The paper discusses the extent to which these two approaches can justify the main features of the traditional stakeholder model

Immoral criminals? An experimental study of social preferences among prisoners.

This paper studies the pro-social preferences of criminals by comparing the behavior of a group of prisoners in a lab experiment with the behavior of a benchmark group recruited from the general population. We find a striking similarity in the importance the two groups attach to pro-social preferences in both in strategic and non-strategic situations. This result also holds when the two groups interact. Data from a large internet experiment,matched with official criminal records, suggest that our main finding from the lab experiment is not influenced by the additional scrutiny experienced by participants in prison.Pro-social preferences; Criminals; Lab experiment

Just Luck: An Experimental Study of Risk Taking and Fairness.

Choices involving risk significantly aect the distribution of income and wealth in society, but there is probably no more contentious question of justice than how to allocate the gains and losses that inevitably result from risky choices. This paper reports the results from the first experiment, to our knowledge, to study fairness views about risk-taking, where the main aim is to examine whether people's fairness considerations mainly focus on ex ante opportunities or ex post outcomes. The experiment was a two stage dictator game where the distribution phase was preceded by a risk-taking phase. Our analysis provides four main findings. First, we show that even though many participants focus exclusively on ex ante opportunities, the majority favors some redistribution ex post. Second, we find that, among the participants who redistribute ex post, a substantial share make a distinction between ex post inequalities that reflect differences in luck and ex post inequalities that reflect differences in choices. Third, we show that the appeal of the ex ante view is independent of how costly it is to avoid exposure to risk. Fourth, we find that the choices of stakeholders and impartial spectators reflect the same set of fairness considerations.Risk-taking; fairness; luck; equal opportunities.

Social Preferences in the Lab: A Comparison of Students and a Representative Population

Can lab experiments on student populations serve to identify the motivational forces present in society at large? We address this question by conducting, to our knowledge, the first study of social preferences that brings a nationally representative population into the lab, and we compare their behavior to the behavior of different student populations. Our study shows that students may not be informative of the role of social preferences in the broader population. We find that the representative participants differ fundamentally from students both in their level of selfishness and in the relative importance assigned to different moral motives. It is also interesting to note that while we do not find any substantial gender differences among the students, males and females in the representative group differ fundamentally in their moral motivation.social preferences, representative population, dictator game, trust game

Just luck: an experimental study of risk taking and fairness

Choices involving risk significantly affect the distribution of income and wealth in society. This paper reports the results of the first experiment, to our knowledge, to study fairness views about risk-taking, specifically whether such views are based chiefly on ex ante opportunities or on ex post outcomes. We find that, even though many participants focus exclusively on ex ante opportunities, most favor some redistribution ex post. Many participants also make a distinction between ex post inequalities that reflect differences in luck and ex post inequalities that reflect differences in choices. These findings apply to both stakeholders and impartial spectators.fairness; justice; risk

Efficiency, equality and reciprocity in social preferences: A comparison of students and a representative population.

The debate between Engelmann and Strobel (2004, 2006) and Fehr, Naef, and Schmidt (2006) highlights the important question of the extent to which lab experiments on student populations can serve to identify the motivational forces present in society at large. We address this question by comparing the lab behavior of a student group and a non-student group, where the non-student group on all observable factors is almost identical to the representative adult population in Norway. All participants take part in exactly the same lab experiment. Our study shows that students may not be informative of the role of social preferences in the broader population. We nd that the representative participants differ fundamentally from students both in their level of selfishness and in the relative importance assigned to different moral motives. It is also interesting to note that while we do not find any substantial gender differences among the students, males and females in the representative group differ fundamentally in their moral motivation.Representative sample; Social preferences; Laboratory experiment.

Experimental Evidence on the Acceptance of Males Falling Behind

In recent decades, an increasing share of males struggle in the labor market and education. We show in a set of large-scale experimental studies involving more than 30,000 Americans that people are more accepting of males falling behind than females falling behind and less supportive of government policies supporting males falling behind. We provide evidence of the underlying mechanism being statistical fairness discrimination: people consider males falling behind to be less deserving of support than females falling behind because they believe that males are more likely than females to fall behind due to lack of effort. The findings are important for understanding how society perceive and respond to the growing number of disadvantaged males

Fair tax evasion

In this paper we analyse how fairness considerations, in particular considerations of just income distribution, affect whether or not people believe tax evasion can be justified and their willingness to engage in tax evasion. Using data from the Norwegian “Hidden Labour Market Survey” we show that individuals with low wages or long working hours, individuals that are treated unfairly by most tax systems, have a higher probability of justifying tax evasion. The same individuals are also more willing to take home income without reporting it to the tax authorities. These results are consistent with a model in which individuals make a trade-off between economic gains and fairness considerations when they make decisions about tax evasion. Taken together our results suggest that considerations of fair income distribution are important for the analysis of tax evasion

Cancel the deal? An experimental study on the exploitation of irrational consumers

Consumers can sometimes be exploited because they make mistakes in their valuation of products. We present the results from a large-scale experimental study that examines whether third-party spectators from the general population in the United States cancel a deal where a buyer has made a mistake in the valuation of a product and agreed to pay more for the product than the seller knows it is worth. We find that the majority of the spectators cancel such deals even when the seller’s involvement is limited to accepting a proposal made by the buyer. A substantial share of these spectators are also willing to fine the seller. However, a large minority of the spectators are willing to uphold the deal even when the seller has proposed the deal and obfuscated the information provided to the buyer. Our results shed new light on when people view market transactions as acceptable and their attitudes to government regulation of businesses