  We use a controlled laboratory experiment to study the causal impact of
income decreases within a time period on redistribution decisions at the end of
that period, in an environment where we keep fixed the sum of incomes over the
period. First, we investigate the effect of a negative income trend
(intra-personal decrease), which means a decreasing income compared to one's
recent past. Second, we investigate the effect ofa negative income trend
relative to the income trend of another person (inter-personal decrease). If
intra-personal or inter-personal decreases create dissatisfaction for an
individual, that person may become more selfish to obtain compensation. We
formal-ize both effects in a multi-period model augmenting a standard model of
inequality aversion. Overall, conditional on exhibiting sufficiently-strong
social preferences, we find that individuals indeed behave more selfishly when
they experience decreasing incomes. While many studies examine the effect of
income inequality on redistribution decisions, we delve into the history behind
one's income to isolate the effect of income changes.
