Voting for the distribution rule in a Public Good Game with heterogeneous endowments
Annarita Colasante (colasante.a84@gmail.com) and
Alberto Russo
Journal of Economic Interaction and Coordination, 2017, vol. 12, issue 3, No 1, 443-467
Abstract:
Abstract This paper analyzes the impact of inequality in the distribution of endowments on cooperation. We conduct a lab experiment using a dynamic Public Good Game to test this relation. We introduce the possibility of choosing among three different redistribution rules: Equidistribution, Proportional to contribution and Progressive to endowment. This novelty in a dynamic environment allows us to analyze how the inequality within groups changes according to individual choices and to investigate if players show inequity averse preferences. Results show that inequality has a negative impact on individual contribution. Players act in order to reduce the initial exogenous inequality. Indeed, in the Treatment with the highest level of inequality, agents vote for reducing the endowment heterogeneity. Moreover, individual contribution is strongly influenced by others’ contributions.
Keywords: Reciprocity; Dynamic Public Good Game; Inequality; Cooperation (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:spr:jeicoo:v:12:y:2017:i:3:d:10.1007_s11403-016-0172-1
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DOI: 10.1007/s11403-016-0172-1
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