Fairness, Risk Aversion and the Welfare State. An Experimental Investigation

Modern developed societies differ substantially in their willingness to support the redistribution of wealth by the government. Consequently, the size of the welfare state varies considerably, with a well-known difference between the USA and continental Europe (see e.g. [Alesina and Glaeser, 2004] and references therein). To the extent that transfers of wealth are costly (as they involve substantial efficiency loss, see e.g. Browning, 1993), it appears desirable to investigate the determinants of the support for redistribution: it may be possible to satisfy these needs in a more cost-effective way