[go: up one dir, main page]
More Web Proxy on the site http://driver.im/
IDEAS home Printed from https://ideas.repec.org/p/anc/wpaper/401.html
   My bibliography  Save this paper

The Impact of Inequality on Cooperation: An Experimental Study

Author

Listed:
  • Annarita COLASANTE

    (Universit… Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali)

  • Alberto RUSSO

    (Universit… Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali)

Abstract
This paper analyzes the impact of inequality in the distribution of endowments on contributions. We conduct a lab experiment using the well-known Public Good Game to test the relation between inequality and contribution to a public fund. We introduce the possibility to choose among three different redistribution rules: equidistribution, proportional to contribution and progressive to endowment. This novelty, combined with a payoff function that depends also on previous period behavior, allows us to verify the hypothesis that players show inequity averse preferences. Results show that inequality has a negative impact on individual contribution. Since inequality is decreasing during repetitions, we deduce that players show inequity averse preferences.

Suggested Citation

  • Annarita COLASANTE & Alberto RUSSO, 2014. "The Impact of Inequality on Cooperation: An Experimental Study," Working Papers 401, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    • Handle: RePEc:anc:wpaper:401
    as

    Download full text from publisher

    File URL: http://docs.dises.univpm.it/web/quaderni/pdf/401.pdf
    File Function: First version, 2014
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ernst Fehr & Simon Gächter, 2000. "Fairness and Retaliation: The Economics of Reciprocity," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 159-181, Summer.
    2. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory of Fairness, Competition, and Cooperation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(3), pages 817-868.
    3. Anderson, Lisa R. & Mellor, Jennifer M. & Milyo, Jeffrey, 2008. "Inequality and public good provision: An experimental analysis," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(3), pages 1010-1028, June.
    4. Urs Fischbacher & Simon Gachter, 2010. "Social Preferences, Beliefs, and the Dynamics of Free Riding in Public Goods Experiments," American Economic Review, American Economic Association, vol. 100(1), pages 541-556, March.
    5. Fehr, Ernst & Schmidt, Klaus M., 2006. "The Economics of Fairness, Reciprocity and Altruism - Experimental Evidence and New Theories," Handbook on the Economics of Giving, Reciprocity and Altruism, in: S. Kolm & Jean Mercier Ythier (ed.), Handbook of the Economics of Giving, Altruism and Reciprocity, edition 1, volume 1, chapter 8, pages 615-691, Elsevier.
    6. Raymond Fisman & Shachar Kariv & Daniel Markovits, 2007. "Individual Preferences for Giving," American Economic Review, American Economic Association, vol. 97(5), pages 1858-1876, December.
    7. Rapoport, Amnon & Suleiman, Ramzi, 1993. "Incremental Contribution in Step-Level Public Goods Games with Asymmetric Players," Organizational Behavior and Human Decision Processes, Elsevier, vol. 55(2), pages 171-194, July.
    8. Balafoutas, Loukas & Kocher, Martin G. & Putterman, Louis & Sutter, Matthias, 2013. "Equality, equity and incentives: An experiment," European Economic Review, Elsevier, vol. 60(C), pages 32-51.
    9. Bochet, Olivier & Page, Talbot & Putterman, Louis, 2006. "Communication and punishment in voluntary contribution experiments," Journal of Economic Behavior & Organization, Elsevier, vol. 60(1), pages 11-26, May.
    10. Gaechter, S. & Mengel, F. & Tsakas, E. & Vostroknutov, A., 2013. "Growth and inequality in public good games," Research Memorandum 070, Maastricht University, Graduate School of Business and Economics (GSBE).
    11. Andreoni, James, 1990. "Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving?," Economic Journal, Royal Economic Society, vol. 100(401), pages 464-477, June.
    12. Nikolaos Georgantzís & Antonios Proestakis, 2011. "Accounting for real wealth in heterogeneous-endowment public good games," ThE Papers 10/20, Department of Economic Theory and Economic History of the University of Granada..
    13. Rachel T. A. Croson, 2007. "Theories Of Commitment, Altruism And Reciprocity: Evidence From Linear Public Goods Games," Economic Inquiry, Western Economic Association International, vol. 45(2), pages 199-216, April.
    14. Andre Hofmeyr & Justine Burns & Martine Visser, 2007. "Income Inequality, Reciprocity And Public Good Provision: An Experimental Analysis," South African Journal of Economics, Economic Society of South Africa, vol. 75(3), pages 508-520, September.
    15. Fischbacher, Urs & Gachter, Simon & Fehr, Ernst, 2001. "Are people conditionally cooperative? Evidence from a public goods experiment," Economics Letters, Elsevier, vol. 71(3), pages 397-404, June.
    16. Cherry, Todd L. & Kroll, Stephan & Shogren, Jason F., 2005. "The impact of endowment heterogeneity and origin on public good contributions: evidence from the lab," Journal of Economic Behavior & Organization, Elsevier, vol. 57(3), pages 357-365, July.
    17. Kenneth Chan & Stuart Mestelman & Robert Moir & R. Muller, 1999. "Heterogeneity and the Voluntary Provision of Public Goods," Experimental Economics, Springer;Economic Science Association, vol. 2(1), pages 5-30, August.
    18. Daniel Balliet, 2010. "Communication and Cooperation in Social Dilemmas: A Meta-Analytic Review," Journal of Conflict Resolution, Peace Science Society (International), vol. 54(1), pages 39-57, February.
    19. Buckley, Edward & Croson, Rachel, 2006. "Income and wealth heterogeneity in the voluntary provision of linear public goods," Journal of Public Economics, Elsevier, vol. 90(4-5), pages 935-955, May.
    20. Cherry, Todd L. & Shogren, Jason F., 2008. "Self-interest, sympathy and the origin of endowments," Economics Letters, Elsevier, vol. 101(1), pages 69-72, October.
    21. Cardenas, Juan-Camilo, 2003. "Real wealth and experimental cooperation: experiments in the field lab," Journal of Development Economics, Elsevier, vol. 70(2), pages 263-289, April.
    22. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Annarita Colasante & Alberto Russo, 2017. "Voting for the distribution rule in a Public Good Game with heterogeneous endowments," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 12(3), pages 443-467, October.
    2. Weng, Qian & Carlsson, Fredrik, 2015. "Cooperation in teams: The role of identity, punishment, and endowment distribution," Journal of Public Economics, Elsevier, vol. 126(C), pages 25-38.
    3. Felix Koelle, 2012. "Heterogeneity and Cooperation in Privileged Groups: The Role of Capability and Valuation on Public Goods Provision," Cologne Graduate School Working Paper Series 03-08, Cologne Graduate School in Management, Economics and Social Sciences.
    4. Balafoutas, Loukas & Kocher, Martin G. & Putterman, Louis & Sutter, Matthias, 2013. "Equality, equity and incentives: An experiment," European Economic Review, Elsevier, vol. 60(C), pages 32-51.
    5. Reuben, Ernesto & Riedl, Arno, 2013. "Enforcement of contribution norms in public good games with heterogeneous populations," Games and Economic Behavior, Elsevier, vol. 77(1), pages 122-137.
    6. Jonathan Maurice & Agathe Rouaix & Marc Willinger, 2013. "Income Redistribution And Public Good Provision: An Experiment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 54(3), pages 957-975, August.
    7. Paetzel, Fabian & Traub, Stefan, 2017. "Skewness-adjusted social preferences: Experimental evidence on the relation between inequality, elite behavior, and economic efficiency," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 68(C), pages 130-139.
    8. Martin Kesternich & Andreas Lange & Bodo Sturm, 2018. "On the performance of rule-based contribution schemes under endowment heterogeneity," Experimental Economics, Springer;Economic Science Association, vol. 21(1), pages 180-204, March.
    9. Spiller, Jörg & Ufert, Aneta & Vetter, Patrick & Will, Ulrike, 2016. "Norms in an asymmetric Public Good experiment," Economics Letters, Elsevier, vol. 142(C), pages 35-44.
    10. Marie Claire Villeval, 2012. "Contribution au bien public et préférences sociales : Apports récents de l'économie comportementale," Post-Print halshs-00681348, HAL.
    11. Andreas Löschel & Dirk Rübbelke, 2014. "On the Voluntary Provision of International Public Goods," Economica, London School of Economics and Political Science, vol. 81(322), pages 195-204, April.
    12. Markussen, Thomas & Sharma, Smriti & Singhal, Saurabh & Tarp, Finn, 2021. "Inequality, institutions and cooperation," European Economic Review, Elsevier, vol. 138(C).
    13. Khadjavi, Menusch & Lange, Andreas & Nicklisch, Andreas, 2014. "The Social Value of Transparency and Accountability: Experimental Evidence from Asymmetric Public Good Games," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100512, Verein für Socialpolitik / German Economic Association.
    14. Brekke, Kjell Arne & Konow, James & Nyborg, Karine, 2017. "Framing in a threshold public goods experiment with heterogeneous endowments," Journal of Economic Behavior & Organization, Elsevier, vol. 138(C), pages 99-110.
    15. Fluet, Claude & Galbiati, Rpbertp, 2016. "Lois et normes : les enseignements de l'économie comportementale," L'Actualité Economique, Société Canadienne de Science Economique, vol. 92(1-2), pages 191-215, Mars-Juin.
    16. Martin G. Kocher & Peter Martinsson & Kristian Ove R. Myrseth & Conny E. Wollbrant, 2017. "Strong, bold, and kind: self-control and cooperation in social dilemmas," Experimental Economics, Springer;Economic Science Association, vol. 20(1), pages 44-69, March.
    17. Gangadharan, Lata & Nikiforakis, Nikos & Villeval, Marie Claire, 2017. "Normative conflict and the limits of self-governance in heterogeneous populations," European Economic Review, Elsevier, vol. 100(C), pages 143-156.
    18. Guererk, Oezguer & Rockenbach, Bettina & Wolff, Irenaeus, 2010. "The effects of punishment in dynamic public-good games," MPRA Paper 22097, University Library of Munich, Germany.
    19. Kreitmair, Ursula & Bower-Bir, Jacob, 2021. "Too different to solve climate change? Experimental evidence on the effects of production and benefit heterogeneity on collective action," Ecological Economics, Elsevier, vol. 184(C).
    20. Martinangeli, Andrea F.M. & Martinsson, Peter, 2020. "We, the rich: Inequality, identity and cooperation," Journal of Economic Behavior & Organization, Elsevier, vol. 178(C), pages 249-266.

    More about this item

    Keywords

    Inequality; Public Good Game; Reciprocity;
    All these keywords.

    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:anc:wpaper:401. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Maurizio Mariotti (email available below). General contact details of provider: https://edirc.repec.org/data/deancit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.