Sharing and cooperation in an experiment with heterogeneous groups

Kjetil Bjorvatn,Nicola D Coniglio

doi:10.1016/j.econlet.2020.109619

Kjetil Bjorvatn, Nicola D Coniglio

Open Access

https://doi.org/10.1016/j.econlet.2020.109619

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Abstract

We investigate the impact of inequality on sharing and cooperation using a dictator game and a linear public good game where some participants work for their endowment (“workers”) while others do not (“non-workers”). Moreover, we differentiate between two types of inequality, namely in source and in level. In contrast to most studies, participants are fully informed about the endowment of the other players. The key finding of our paper is that both sharing and cooperation critically depend on the source of the endowment. In particular, workers are more likely to share with other workers than with non-workers and more inclined to contribute to the public good when grouped with other workers rather than when grouped with non-workers. Considering also the choices made by non-workers, we argue that the worker premium in sharing and cooperation is based on fairness considerations rather than an in-group bias. Adding inequality in the level of endowment reduces the importance of the source of endowment as driver of behavior. This also suggests that reducing one layer of inequality may not improve cooperative behavior in society significantly, implying that a big-push policy tackling many dimensions of inequality at the same time may be required.

Highlights

Inequality is on the rise and there is a fear that this will lead to a society with less sharing and less cooperation (Piketty, 2014; Piketty and Zucman, 2014; Putnam, 2000)
Yi refers to either contributions in the dictator game or contributions to the public fund in the public good game, while W is a dummy which takes the value one if the worker is grouped with other workers and zero if grouped with non-workers
Our hypothesis is that the greater sharing and cooperation by workers when facing other workers, compared to when facing non-workers, is based on fairness considerations: effort should be rewarded, be it as transfers in the dictator game or contributions in the public good game

Summary

Introduction

Inequality is on the rise and there is a fear that this will lead to a society with less sharing and less cooperation (Piketty, 2014; Piketty and Zucman, 2014; Putnam, 2000). We find that the co-worker premium in sharing and cooperation is strongest in a setting without additional inequalities, notably in the level of endowment, which we argue is likely to be due to the reduced salience of work status as source of inequality in a more complex environment This suggests that reducing one dimension of inequality may not be very effective in terms of stimulating sharing and cooperation, as it may increase the salience of the remaining dimensions, a finding which may have important policy implications. They do not, consider public good games or the question of how cooperation or sharing is affected by homogeneity or heterogeneity in group composition.2 Another innovation in our experiment is the fact that earnings from work are derived from a manual and tedious exercise rather than from a cognitive task, where the latter is the typical approach in the literature.

The experiment and the sample

Empirical approach

Regression results

Conclusion