Rule-Inequality-Aversion Preference and Conditional Cooperation in Public Goods Experiments: Economic Experiment Evidence from China

Abstract

We provide an experimental investigation of the fair rule preference and its effect on anonymous cooperation, intending to test the hypothesis that people who exhibit high degrees of rule inequality aversion—consider “equality and mutual obligation under the social contract” as justified, are disgusted with free-rider behavior in the public goods game and are more likely to be conditional cooperators and make conditional contributions. Based on experimental work related to rule-preferences Chlas and Moffatt (Giving in dictator games: experimenter demand effect or preference over the rules of the game? (No. 2012, 044). Jena Economic Research Papers, 2012) and the public goods game Fischbacher et al. (Am Econ Rev 100(1):541–556, 2010), we designed a dictator game with the option of buying a veto (when the veto was purchased, the level of rule inequality decreased, making it an ultimatum game) to measure rule preference, i.e., rule inequality aversion, and conducted a two-stage public goods experiment to identify the cooperation preferences and repeated cooperation levels of participants. We investigated the relationship between rule preferences and cooperative preferences (conditional reciprocal preference) and tried to explain the adjustments people made when making repeated contributions of public goods (conditional cooperation behavior) from a rule preference perspective. The results show that: (1) Heterogeneous rule-inequality-aversion preferences are found in lab; (2) The stronger the rule-inequality-aversion preference is, the higher the probability is for the individual to become a conditional cooperator in public goods experiment; (3) Individuals who have stronger rule-inequality-aversion are more sensitive to the contributions that are deviated from the norm. Compared to the theory of conditional cooperation types, rule-inequality-aversion preference has a better explanation power when it comes to the behavior adjustment in repeated public goods contribution.