Recent studies suggest that the US and Europe differ in perceptions regarding how income inequality is generated (Alesina, Glaeser and Sacerdote (2001), and Alesina and Angeletos (2005)). Americans believe that economic success is due to hard work, whereas Europeans believe that luck and connections play an important role in income inequality. According to the World Values Survey, 71 percent of Americans versus 40 percent of Europeans believe that the poor could become richer if they just tried hard enough. This might imply that the US and Europe permit the development of different social norms over time. While Americans have formed strong effort rewarding norms, Europeans may have much weaker norms that reward effort and much stronger norms of redistribution.

We will follow an experimental approach to disentangle how Americans and Europeans reward effort. This enables us to control as many factors as possible across two different cultures and focus solely on social norms (among others see Roth et al. (1991), and Henrich et al. (2001)). Initially, we plan to conduct our experiments in two different countries: US, and Spain. We will use two-person and three-person distribution games in order to compare how Americans and Europeans allocate an income. We will use two-person dictator games to elicit preferences for giving, which governs the tradeoffs that self makes between his payoffs and the payoffs of others (all persons except self), and three-person dictator games to elicit social preferences, which govern the tradeoffs self makes among the payoffs to others (Charness and Rabin (2002), Engelmann and Strobel (2004) and Fisman et al. (2007)).