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Free keywords:
redistribution; franchise extension; revolution; elite behavior; coordination; battle of the sexes; experiment
JEL:
C72 - Noncooperative Games
JEL:
C92 - Laboratory, Group Behavior
JEL:
D74 - Conflict; Conflict Resolution; Alliances; Revolutions
JEL:
H23 - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
JEL:
P48 - Political Economy; Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
Abstract:
The threat of revolution disciplines the elites, inducing them to strategically share some of their wealth in order to prevent social unrest. This behavioral conjecture is prominently used to explain franchise extension and welfare state expansion. We test this conjecture in a controlled laboratory experiment. We model a society whose members can produce wealth by coordinating conflicting interests. Coordination is facilitated through a status-ranking. Compliance with the ranking yields an efficient yet inequitable payoff distribution. Between treatments, we vary (a) whether overthrows – which reset the status-ranking via collective disobedience – are possible or not, and (b) whether voluntary redistributive transfers – which high-status players can use to appease low-status players – are available or not. In contrast to established thinking, we find that, on average, the threat of being overthrown does not lead to more wealth-sharing as high-status players fail to provide sufficient redistribution to prevent overthrows.
