Our study investigates the emergence of redistribution societies when individuals vote on distribution rules with their feet. The choice of a distribution rule is a strategic decision since individuals differ in the productivity of their investments and hence total income depends on the types of individuals who have chosen the same distribution rule. In our laboratory experiment, we find that, compared to full information, the amount of redistribution increases if individuals face uncertainty about their productivity at the time they choose a distribution rule. Moreover, we find a coexistence of libertarian and redistributive societies as well as imperfect segregation for all degrees of uncertainty, so that heterogeneous redistribution societies turn out to be sustainable throughout.
Our study investigates the emergence of redistribution societies when individuals vote on distribution rules with their feet. The choice of a distribution rule is a strategic decision since individuals differ in the productivity of their investments and hence total income depends on the types of individuals who have chosen the same distribution rule. In our laboratory experiment, we find that, compared to full information, the amount of redistribution increases if individuals face uncertainty about their productivity at the time they choose a distribution rule. Moreover, we find a coexistence of libertarian and redistributive societies as well as imperfect segregation for all degrees of uncertainty, so that heterogeneous redistribution societies turn out to be sustainable throughout.