Social costs of inequality: Heterogeneous endowments in public-good experiments

Claudia Keser, Andreas Markstädter, Martin Schmidt and Cornelius Schnitzler

No 217, University of Göttingen Working Papers in Economics from University of Goettingen, Department of Economics

Abstract: We compare voluntary contributions to the financing of a public good in a symmetric setting to those in asymmetric settings, in which four players have different, randomly allocated endowments. We observe that a weak asymmetry in the endowment distribution leads to the same contribution level as symmetry. Players tend to contribute the same proportion of their respective endowment. In a strongly asymmetric setting, where one player has a higher endowment than the three other players together, we observe significantly lower group contributions than in the other settings. The super-rich player does not contribute significantly more than what the others contribute on average and thus a much lower proportion of the endowment.

Keywords: experimental economics; linear public good; income heterogeneity (search for similar items in EconPapers)
JEL-codes: C92 D63 H41 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-cbe, nep-cdm, nep-exp and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cegedp:217

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