The Merit Primacy Effect

Abstract

A long history in economics going back to Adam Smith has argued that people give primacy to merit – rather than luck – in distributive choices. We provide a theoretical framework formalizing the merit primacy effect, and study it in a novel experiment where third-party spectators redistribute from high-earners to low-earners in situations where both merit and luck determine earnings. We identify a strong and consistent merit primacy effect in the spectator behaviour. The results shed new light on inequality acceptance in society, by showing how just a little bit of merit can make people significantly more inequality accepting.