Overconfidence, Income-Ability Gap, and Preferences for Income Equality
38 Pages Posted: 18 Feb 2021 Last revised: 27 Apr 2021
Date Written: January 29, 2021
Overconfident people who do not earn what they think they can may attribute this cognitive gap to the unfairness of the economy and thereby favor public redistribution when they realize their cognitive gap. We conducted an online survey experiment in the US in which we assigned the treatment emphasizing each respondent's self-perception of the income-ability gap randomly. We found that the treatment lowers overconfident respondents' perception of the fairness of the economy among both left- and right-wing people. However, it did not increase the support for reducing income inequality. Instead, it increased support for government intervention to correct inequality among leftists with high trust in the US government.
Keywords: Preferences for redistribution, Overconfidence, Political ideology, Political distrust, Meritocracy
JEL Classification: D31, D72, H23, H24
Suggested Citation: Suggested Citation