No evidence of inequality aversion in the investment game

Ismael Rodriguez-Lara

PLOS ONE, 2018, vol. 13, issue 10, 1-16

Abstract: We report experimental evidence on second-movers’ behavior in the investment game (also known as the trust game) when there exists endowment heterogeneity. Using a within-subject analysis, we investigate whether or not second-movers exhibit some taste for inequality aversion by returning a larger (smaller) share of the available funds to first-movers who are initially endowed with a lesser (larger) endowment, respectively. Our data suggest that second-movers do not take into consideration the level of endowments when making their decisions as their behavior is consistent across distribution of endowments; i.e., they return the same proportion of the available funds regardless of the endowments. We indeed find that some second-movers have a tendency to return what they have received from first-movers. In our data, there is also a substantial proportion of second-movers who are selfish and return nothing. (JEL Codes: C72, C91, D3, D63).

Date: 2018
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Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:plo:pone00:0204392

DOI: 10.1371/journal.pone.0204392

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