Experimental Evidence on Inequality Aversion: Dictators Give to Help the Less Fortunate + Oleg Korenok, Edward L. Millner, and Laura Razzolini ∗ Virginia Commonwealth University 28 August 2008 Abstract: We design an experiment to identify the motivation underlying dictators’ behavior. In the typical dictator game, the recipient’s payoff is completely determined by the amount passed. We give an endowment to the recipient as well as the dictator, breaking the equivalence between the amount passed and the recipient’s payoff. The majority of dictators behave as if recipients’ payoffs are normal goods. When we increased recipients’ endowments, dictators decreased the amounts passed. More than half of dictators are averse to inequality. They passed nothing when endowments were equalized. We conclude that in the standard dictator game most dictators pass because the recipients are given no endowments and inequality is at its maximum. Keywords: Other-regarding utility, dictator game + We would like to thank James Cox, Rachel Croson, Shakun Datta, Doug Davis, Asen Ivanov, Roger Sherman and participants at the a University of Richmond seminar for providing helpful and insightful comments on the paper. Research support provided by NSF grant SES-9973731 to Razzolini is gratefully acknowledged. Any remaining errors are our own. * Corresponding author: Laura Razzolini, lrazzolini@vcu.edu , Richmond VA 23284- 4000, (804) 828-7187 1