Inequality and Public Goods Provision in Transparent Contexts

Christopher Oconnor ()
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Christopher Oconnor: College of the Holy Cross

No 2501, Working Papers from College of the Holy Cross, Department of Economics

Abstract: This paper experimentally examines the question of how inequality in wealth affects contributions to public goods in a setting where contributors observe each other’s ac- tions. While prior studies generally find that inequality uniformly reduces contributions in anonymous settings, I find that this result does not extend to the transparent setting of this paper. It is observed that inequality reduces contributions to public goods only in the case of extreme inequality. For low to medium levels of inequality, the oppo- site is observed: inequality increases contributions to public goods. Furthermore, rich subjects in low to medium level of inequality increased their contributions to public goods relative to contributions observed in equality. However, as inequality gets even higher, the rich kept their contributions at the level observed in equality. This paper develops an economic theory integrating inequality and social image concerns, which contextualizes the experimental results.

Keywords: Public Goods Game; Laboratory Experiment; Information; Social Image (search for similar items in EconPapers)
JEL-codes: C72 C91 D64 D91 H41 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2025-03
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