Do Economic Inequalities Affect Long-Run Cooperation & Prosperity?
Gabriele Camera (),
Cary Deck and
Working Papers from Chapman University, Economic Science Institute
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.
Keywords: cooperation; experiments; indefinitely repeated games; social dilemmas (search for similar items in EconPapers)
JEL-codes: C70 C90 D03 E02 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-exp, nep-gth, nep-hpe, nep-ltv and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:chu:wpaper:19-09
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