People's Preferences for Inequality Respond Instantly to Changes in Status: A Simulated Society Experiment of Conflict Between the Rich and the Poor

Abstract

AbstractMost people in the United States agree they want some income inequality but debate exactly how much is fair. High‐status people generally prefer more inequality than low‐status individuals. Here we examine how much preferences for inequality are (or are not) driven by self‐interest. Past work has generally investigated this idea in two ways: The first is by stratifying preferences by income, and the second is by randomly assigning financial status within lab‐constructed scenarios. In this paper, we develop a method that combines both experimental control and the social experience of inequality—a simulated society experiment. Across two experiments (N = 138, observations = 690), participants voted on the distribution of rewards—first behind a veil of ignorance, and then when they were randomly assigned a status within a game of chance. Status varied repeatedly across five rounds, allowing us to measure dynamic preferences. Under the veil of ignorance, people preferred inequality favoring the top status. When the veil of ignorance disappeared, self‐interest immediately influenced inequality preferences. Those who randomly landed in top positions were satisfied with the status quo established under the veil of ignorance, whereas those who randomly landed in bottom positions wanted more equality. Yet these preferences were not stable; decisions about the optimal level of inequality changed according to changes in social status. Our results also showed that, when inequality grows in a society, preferences regarding inequality become polarized by social status. Individuals in low‐status positions, particularly, tend to demand more equality.