Rank Preserving Preferences

Hierarchies are stable institutions both within organizations and in society at large. While we know people work to maintain their own status in a hierarchy, and institutions exist to preserve the rank of those at the top, little has been done to measure the preference individuals have for preserving the hierarchical rank ordering of others. Using an original game we call the redistribution game, we show that people tolerate higher inequality in order to preserve preexisting rank orders of endowments. While a majority will accept redistributive transfers in order to reduce inequality, the proportion of subjects who reject the redistributive transfer increase by 31 percent if the transfer reverses the ordering. Controlling for factors like inequality aversion or loss aversion, we attribute the difference to rank preserving preferences (RPP). These results have implications for understanding why we tolerate inequality, and for explaining hierarchy and promotion structures within organizations.