1. Is the veil of ignorance only a concept about risk? An experiment Hannah Hörisch University of Munich ESA 2007 World Meeting Rome, 6/30/2007

2. 2 1. Motivation Topic: relationship between social preferences and maximin principle Rawls (1971): behind veil of ignorance (VoI) society would agree that maximin principle should constitute basis of social contract Utilitarians: voting for maximin principle is only optimal for infinitively risk averse individuals This paper: if people have social preferences they could be in favor of maximin principle even if they are risk- neutral

3. 3 2. Experimental design Three treatments: based on dictator game (DG), 12 units By comparing risk and impartiality treatment we can separate effects of risk and impartial social preferences behind veil of ignorance. Treat- ment Efficiency loss Role uncertainty # of players What is measured? dictator game YesNo2Social preferences impar- tiality Yes 2(Impartial) social preferences with risk riskYes 1Risk aversion

4. 4 3. Results (1) 1. Gender differences Significantly different distributions in all three treatments: Mann-Whitney test: DG tr. p=0.061, risk tr. p=0.014, imp. tr. p=0.000  analyze data for men and women separately Women (men) more concerned about equality (efficiency) Women are slightly more risk averse 2. Comparison of DG and impartiality treatment: VoI does make a difference Mann-Whitney test: men p=0.003, women p=0.002, pooled sample p=0.000 Where does this difference come from? Combination of risk aversion (risk tr.: 80% of women, 61% of men transfer positive amounts, averages 3.7 and 2.7) and impartial social preferences in impartiality tr. as opposed to egoism in DG treatment

5. 5 3. Results (2) 3. Comparison of risk and impartiality treatment: Is VoI only a concept about risk? Analysis of aggregate data: Mann-Whitney test: men p=0.773, women p=0.011, pooled p=0.203  significant difference between risk preferences and impartial social preferences with risk for women, but not for men Analysis of individual level data: Subjects who transfer… Men 91 obs. Women 40 obs. same amount53%22.5% more in imp. tr.24%60% less in imp. tr.23%17.5%  For women, impartial social preferences induce an increased concern for equality

6. 6 6. Conclusions Experimental design achieves to separate effects of risk and impartial social preferences behind the veil of ignorance. Findings: –VoI does make a difference –For men, VoI is only a concept about risk –For women, impartial social preferences are a second motivation behind the VoI, their effect is to increase concern for equality  Results for women: maximin preferences can be derived from combination of finite risk aversion and social preferences