Behind the Veil of Ignorance: Risk Aversion or Inequality Aversion?

This paper successfully decomposes risk attitude and social preference behind the veil of ignorance. Using a novel experiment wherein subjects move graphically along a slider to divide a pie of money between high and low reward in both lottery and VoI treatments, we are able to collect rich data sets at individual level. We check individual preference characteristics including consistency and homotheticity in pure risk and in distributive scenarios and employ two structure models to estimate underlying motivations. The results show aversions of unequal distribution behind VoI are not the same concepts as risk aversions and they are highly heterogeneous among subjects. A significant amount of subjects demonstrate other-regarding preference in the sense of aversion for unequal distribution and of not being jealous when receiving low rewards.