Do Economic Inequalities Affect Long-Run Cooperation & Prosperity?

Authors

Gabriele Camera, Chapman UniversityFollow
Cary Deck, Chapman UniversityFollow
David Porter, Chapman UniversityFollow

Document Type

Article

Publication Date

4-8-2019

Abstract

We explore if fairness and inequality motivations affect cooperation in indefinitely repeated games. Each round, we randomly divided experimental participants into donor-recipient pairs. Donors could make a gift to recipients, and ex-ante earnings are highest when all donors give. Roles were randomly reassigned every period, which induced inequality in ex-post earnings. Theoretically, income-maximizing players do not have to condition on this inequality because it is payoff-irrelevant. Empirically, payoff-irrelevant inequality affected participants’ ability to coordinate on efficient play: donors conditioned gifts on their own past roles and, with inequalities made visible, discriminated against those who were better off.

Comments

Working Paper 19-09

This working paper was later published as:

Recommended Citation

Camera, G., Deck, C., & Porter, D. (2019). Do economic inequalities affect long-run cooperation & prosperity? ESI Working Paper 19-09. Retrieved from https://digitalcommons.chapman.edu/esi_working_papers/267/