Competition, Income Distribution, and the Middle Class: An Experimental Study

Competition, Income Distribution, and the Middle Class: An Experimental Study

We study the effect of competition on income distribution by means of a two-stage experiment. Heterogeneous endowments are earned in a contest, followed by a surplus-sharing task. The experimental test confirms our initial hypothesis that the existence of a middle class is as effective as institutio...

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Main Authors: Bernhard Kittel, Fabian Paetzel, Stefan Traub
Format: Article
Language:English
Published: Hindawi Limited 2015-01-01
Series:Journal of Applied Mathematics
Online Access:http://dx.doi.org/10.1155/2015/303912
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spelling doaj-da39ad4b4248425593330028d8f65b932020-11-24T21:30:07ZengHindawi LimitedJournal of Applied Mathematics1110-757X1687-00422015-01-01201510.1155/2015/303912303912Competition, Income Distribution, and the Middle Class: An Experimental StudyBernhard Kittel0Fabian Paetzel1Stefan Traub2Department of Economic Sociology and FOR 2104, University of Vienna, 1090 Vienna, AustriaDepartment of Economics and FOR 2104, Helmut-Schmidt-University, 22043 Hamburg, GermanyDepartment of Economics and FOR 2104, Helmut-Schmidt-University, 22043 Hamburg, GermanyWe study the effect of competition on income distribution by means of a two-stage experiment. Heterogeneous endowments are earned in a contest, followed by a surplus-sharing task. The experimental test confirms our initial hypothesis that the existence of a middle class is as effective as institutional hurdles in limiting the power of the less able in order to protect the more able players from being expropriated. Furthermore, majoritarian voting with a middle class involves fewer bargaining impasses than granting veto rights to the more able players and, therefore, is more efficient.http://dx.doi.org/10.1155/2015/303912
collection DOAJ
language English
format Article
sources DOAJ
author Bernhard Kittel
Fabian Paetzel
Stefan Traub
spellingShingle Bernhard Kittel
Fabian Paetzel
Stefan Traub
Competition, Income Distribution, and the Middle Class: An Experimental Study
Journal of Applied Mathematics
author_facet Bernhard Kittel
Fabian Paetzel
Stefan Traub
author_sort Bernhard Kittel
title Competition, Income Distribution, and the Middle Class: An Experimental Study
title_short Competition, Income Distribution, and the Middle Class: An Experimental Study
title_full Competition, Income Distribution, and the Middle Class: An Experimental Study
title_fullStr Competition, Income Distribution, and the Middle Class: An Experimental Study
title_full_unstemmed Competition, Income Distribution, and the Middle Class: An Experimental Study
title_sort competition, income distribution, and the middle class: an experimental study
publisher Hindawi Limited
series Journal of Applied Mathematics
issn 1110-757X
1687-0042
publishDate 2015-01-01
description We study the effect of competition on income distribution by means of a two-stage experiment. Heterogeneous endowments are earned in a contest, followed by a surplus-sharing task. The experimental test confirms our initial hypothesis that the existence of a middle class is as effective as institutional hurdles in limiting the power of the less able in order to protect the more able players from being expropriated. Furthermore, majoritarian voting with a middle class involves fewer bargaining impasses than granting veto rights to the more able players and, therefore, is more efficient.
url http://dx.doi.org/10.1155/2015/303912
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AT fabianpaetzel competitionincomedistributionandthemiddleclassanexperimentalstudy
AT stefantraub competitionincomedistributionandthemiddleclassanexperimentalstudy
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