(Not) Everyone can be a winner — The role of payoff interdependence for redistribution

Abstract

Frequently, one person’s success comes at the expense of others. We contrast such zero-sum environments in which individuals’ payoffs are interdependent to those where payoffs are independent. In a laboratory experiment, we study whether the resulting inequality is perceived differently and how this affects redistribution. Across treatments, we compare a spectator’s redistribution of two workers’ earnings. If workers do not compete in a zero-sum setting, average redistribution decreases. In a representative survey, we replicate this finding and document that individuals who believe in a zero-sum world support higher levels of redistribution and are more likely to consider themselves a member of the Democratic party.