Expected income mobility: demand for redistribution and antisocial behavior

This dissertationuses a laboratory experimentto examinethe role ofmobility, self-confidence, and entitlement on the demand for redistribution, discussed in Chapter 1, and on antisocial behavior, discussed in Chapter 2. When people make economic decisions, they generally consider not only how their decisions will affect their current situation, but also how these decisions will affect them in the future. Thus, income mobility seems to play a key role in determining decisions in non-static contexts. This dissertation focuses on two factors that influence subjects’ preferences for redistribution and antisocial behavior when mobility is possible: self-confidence in one’s relative effort and entitlement. When income mobility is possible and individuals can influence mobility through effort, they form their expectations about future mobility through expectations about their own effort relative to others. The measure of self-confidence is then crucial, as overconfident individuals exaggerate the probability of moving up the income distribution, which may alter their support for redistribution and antisocial behavior. On the other hand, entitlement refers to the behavior of individuals when their efforts influence the mobility process or not. If mobility is possible, the role that subjects play in determining their future income may change the way they feel entitled to that income, affecting their support for redistribution and antisocial behavior. The experiments for the two chapters of this dissertation were conducted as part of the same experiment and according to the same experimental design. Subjects chose redistribution rates according to the Melzer and Richards (1981) model, i.e. that can only be applied to their own income, and made decisions about reducing the income of others with no private benefit but at a cost. These decisions were made in the absence or presence of future mobility. The mobility process was modified by subjects’ performance on a test or by luck, depending on the treatment. When decisions were made in the presence of mobility, subjects could at first estimate the mobility process based on their expectations regarding the results of the effort test or lottery, i.e. the mobility process was subjective. Secondly, they knew the objective mobility process resulting from the results of the effort test or the lottery. This design allows for the investigation of the effects of mobility, self-confidence, and entitlement on preferences for redistribution and antisocial behavior. This dissertation provide new insights into the psychological factors that influence attitudes towards redistribution and antisocial behavior and highlight the importance of subjective beliefs and perceptions of fairness for economic mobility.