Are Individuals Luck Egalitarians? – An Experiment on the Influence of Brute and Option Luck on Social Preferences

According to luck egalitarianism, inequalities should be deemed fair as long as they follow from individuals’ deliberate and fully informed choices (i.e., option luck) while inequalities should be deemed unfair if they follow from choices over which the individual has no control (i.e., brute luck). This study investigates if individuals’ fairness preferences correspond with the luck egalitarian fairness position. More specifically, in a laboratory experiment we test how individuals choose to redistribute gains and losses that stem from option luck compared to brute luck. A two-stage experimental design with real incentives was employed. We show that individuals (n = 226) change their action associated with re-allocation depending on the underlying conception of luck. Subjects in the brute luck treatment equalized outcomes to larger extent (p = 0.0069). Thus, subjects redistributed a larger amount to unlucky losers and a smaller amount to lucky winners compared to equivalent choices made in the option luck treatment. The effect is less pronounced when conducting the experiment with third-party dictators, indicating that there is some self-serving bias at play. We conclude that people have fairness preference not just for outcomes, but also for how those outcomes are reached. Our findings are potentially important for understanding the role citizens assign individual responsibility for life outcomes, i.e., health and wealth.