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on Cognitive and Behavioural Economics |
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Issue of 2025–09–29
two papers chosen by Marco Novarese, Università degli Studi del Piemonte Orientale |
| By: | Stefania Bortolotti (University of Bologna & IZA); Felix Kölle (University of Cologne); Ivan Soraperra (Max Planck Institute for Human Development, Center for Human and Machine, Berlin); Matthias Sutter (Max Planck Institute for Research on Collective Goods, Bonn & University of Cologne & University of Innsbruck) |
| Abstract: | Inequality often arises from strategic interactions among individuals. This is so because risky investments can not only be resolved by chance (natural risk), but also by others’ actions (social risk). We study how these different sources of inequality shape fairness judgments and the level of redistribution in a controlled experiment with a total of 2, 152 participants. We find significantly less inequality acceptance, and thus much more redistribution, under social risk. In addition to the well-known types of Libertarians, Egalitarians and Choice Egalitarians, we identify a novel, hitherto unnoticed, fairness type — Insurers — who always compensate unlucky risk-takers and are especially prevalent when one is let down by others rather than simply unlucky by chance. This suggests that impartial spectators view betrayal as more deserving of support than bad luck. Our findings show that fairness ideals depend jointly on risk-taking and the way in which risk is resolved, either by nature or another human actor, thus highlighting the important role of strategic interaction for fairness types and redistribution. |
| Keywords: | Inequality, fairness views, social risk, redistribution, experiment |
| JEL: | C91 D63 D90 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:ajk:ajkdps:370 |
| By: | Roland Bénabou; Luca Henkel |
| Abstract: | We review the economic literature on self-image, which conceptualizes identity as a set of beliefs about one’s core traits, values, goals, and social ties. Self-image concerns lead individuals to process information and make choices in non-standard ways that help affirm and protect certain valued identities. We first present the main cognitive mechanisms involved within a simple unifying framework. We then survey the extensive laboratory, online, and field experimental literature on the nature and behavioral implications of self-image concerns. We discuss in particular how they give rise to information and decision avoidance, motivated memory and beliefs, excuse-driven behavior, preferences for truth-telling, hypothetical bias, moral cleansing and moral licensing, collective identities, political preferences, and other forms of self-signaling or self-deception. We subsequently discuss common empirical strategies used to identify self-image concerns, as well as the threats to their validity and how to alleviate them. We conclude by outlining open questions and directions for future research on the belief-based approach to identity. |
| Keywords: | self-image, identity, motivated beliefs, belief-based utility, behavioral economics, experimental economics |
| JEL: | D01 D91 C90 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12147 |