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.
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/