Absolute vs. relative poverty and wealth: Cooperation in the presence of between-group inequality

Eugenio Levi () and Abhijit Ramalingam
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Eugenio Levi: Department of Public Economics, Masaryk University, Brno, 602 00, Czech Republic, Faculty of Economics and Management, Free University of Bozen-Bolzano, Bozen-Bolzano, 39100, Italy

MUNI ECON Working Papers from Masaryk University

Abstract: While inequality in resource endowments has been shown to affect cooperation levels in groups, much of this evidence comes from studies of within-group inequality. In an online public goods experiment, we instead examine the effects of payoff-irrelevant inequality in resources between groups on cooperation within equal groups. When all groups are poor or rich, their contribution behaviour is very similar. Relative inequality, when poor and rich groups coexist, leads to lower contributions in rich groups. Our results suggest that this is related to a combination of within- and between-group inequality aversion and to stereotypes about the rich contributing less than the poor.

Keywords: between-group; resource inequality; cooperation; public goods; online experiment; beliefs (search for similar items in EconPapers)
JEL-codes: C72 C91 C92 D63 H41 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2023-12
New Economics Papers: this item is included in nep-cdm, nep-exp and nep-gth
Note: License: CC BY-NC-ND 4.0
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Persistent link: https://EconPapers.repec.org/RePEc:mub:wpaper:2023-09

DOI: 10.5817/WP_MUNI_ECON_2023-09

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