Social Sampling, Self-Anchoring and Redistribution

Abstract

We examine the effect that agents anchor their perceptions of societal mean incomes on their own incomes. We show analytically and verify by numerical simulation that self-anchoring can lead to substantial misperceptions even when sampling is unbiased and fully random, especially when the sampling ratio is small. Within a Meltzer–Richard framework, we then demonstrate that self-anchoring leads to a decrease in implemented redistribution.

Citation

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