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Last word not yet spoken: a reinvestigation of last place aversion with aversion to rank reversals

Published online by Cambridge University Press:  14 March 2025

Andrea F. M. Martinangeli Open the ORCID record for Andrea F. M. Martinangeli [Opens in a new window]  and
Lisa Windsteiger
Andrea F. M. Martinangeli*
Affiliation:
Max Planck Institute for Tax Law and Public Finance, Marstallpl. 1, 80539 Munich, Germany
Lisa Windsteiger*
Affiliation:
Max Planck Institute for Tax Law and Public Finance, Marstallpl. 1, 80539 Munich, Germany
*
andrea.martinangeli@tax.mpg.de
lisa.windsteiger@tax.mpg.de
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Abstract

Preferences over social ranks have emerged as potential drivers of weaker than expected support for redistributive interventions among those closest to the bottom of the income distribution. We compare preferences for alterations of the income distribution affecting the decision maker’s social rank, but not their income, and compare them with similar alterations leaving both rank and income unchanged. Our study fails to find evidence of last-place aversion in a replication of Kuziemko et al. (Q J Econ 129(1):105–149, 2014). However, using a modified design that holds ranks fixed across rounds we find support for both a discontinuously greater disutility from occupying the last as opposed to higher ranks, thus affecting only those closest to the bottom of the distribution, and for a general dislike of rank reversals affecting most ranks. We discuss implications for policy design in both public finance and management science.

Keywords

Income distributionLast place aversionPositional concernsPreferences for redistributionRank reversal aversion

JEL classification

D31: Personal Income, Wealth, and Their Distributions H23: Externalities • Redistributive Effects • Environmental Taxes and Subsidies C91: Laboratory, Individual Behavior
Type
Original Paper
Information
Experimental Economics , Volume 24 , Issue 3 , September 2021 , pp. 800 - 820
Copyright
Copyright © 2020 Economic Science Association

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Footnotes

Electronic supplementary material The online version of this article (https://doi.org/10.1007/s10683-020-09682-8) contains supplementary material, which is available to authorized users.

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