Inequality as a Barrier to Economic Integration? An Experiment

Gabriele Camera, Lukas Hohl () and Rolf Weder ()
Additional contact information
Lukas Hohl: University of Basel and Federal Finance Administration
Rolf Weder: University of Basel

Working Papers from Chapman University, Economic Science Institute

Abstract: International economic theory suggests that people should embrace economic integration because it promises large gains. But policy reversals such as Brexit indicate a desire for economic disintegration. Here we report results of an experiment of how size and cross-country distribution of gains from integration influence individuals’ inclination to cooperate to reap its intended benefits and to embrace or reject integration. The design considers an indefinitely repeated helping game with multiple equilibria and strategic uncertainty. The data reveal that inequality of potential gains neither affected behavior nor reduced support for economic integration. However, integration may lead to disappointing, unequally distributed welfare gains, undermining support for the policy. This suggests that to better assess integration policies, we should account for the spillover effects of integration on behavior. Miscalculating this behavioral aspect may undermine the intended development goals and motivate calls for dramatic policy-reversals.

Keywords: economic opportunity; endogenous institutions; globalization; indefinitely repeated games; social dilemmas (search for similar items in EconPapers)
JEL-codes: C70 C90 F02 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-exp, nep-gth and nep-int
References: Add references at CitEc
Citations:

Downloads: (external link)
https://digitalcommons.chapman.edu/esi_working_papers/377/

Related works:
Journal Article: Inequality as a barrier to economic integration? An experiment (2023)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:chu:wpaper:22-16

Access Statistics for this paper

More papers in Working Papers from Chapman University, Economic Science Institute Contact information at EDIRC.
Bibliographic data for series maintained by Megan Luetje ().