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This paper explores the effect of income inequality on the voluntary contributions to a dynamic public good. We find that income heterogeneity has a significant impact both on contributions and welfare. The results show that the often observed decay of cooperation does not carry over to the asymmetric environment considered in this study. Our resul...
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... by individuals with the same income differ depending on how heterogeneous the dynamic public good environment is. Figure 7 shows the absolute amount of endowment contributed to the dynamic public goods by the subjects with 40 tokens in T1 and T2. We use a 15 The average contribution (percentage of income) by an individual across all periods is taken as the unit of observation. ...
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Citations
... Tieto výsledky sú konzistentné aj s výsledkami štúdie Hofmeyr et al. (2007), ktorá tieţ nezistila významné rozdiely medzi nominálnou výškou príspevkov nízko-príjmových a vysokopríjmových jednotlivcov. K opačnému záveru dospeli Seçilmiş a Güran (2012). Výsledky ich experimentu ukázali, ţe príjmová heterogenita účastníkov mala štatisticky významný vplyv na výšku ich príspevkov na verejné statky. ...
... Other public goods experiment-based studies suggest that economic heterogeneity is likely to have a deleterious impact on collective action (Anderson et al., 2008;Fung & Au, 2014;Seçilmiş & Güran, 2012), especially when individuals are aware of differences in wealth levels (Anderson et al., 2008). Given subjects having full information and the absence of corrective institutions, we, thus, hypothesize that wealth heterogeneity undermines collective action: ...
... Most public goods experiments examining the proportion of endowments contributed by participants in a heterogeneous environment have found that high-endowment players contribute a lower proportion of their endowments than do low-endowment players (Buckley & Croson, 2006;Cardenas et al., 2002;Chan et al., 1996;Cherry et al., 2005;Hargreaves Heap et al., 2016;Kingsley, 2016;Rapoport & Suleiman, 1993;Visser & Burns, 2015). However, at least two studies found no significant difference between players of different endowment levels regarding the absolute amount of endowments contributed to a collective pool (Hofmyer et al., 2007;Seçilmiş & Güran, 2012 (Andreoni, 1995;Fehr & Schmidt, 1999;Fischbacher et al., 2001). ...
Community‐based conservation is a widely adopted wildlife governance approach, but questions remain about the conditions under which this form of wildlife governance achieves success. Particularly, participating communities are often marked by considerable wealth and risk heterogeneities that are driven by differences in livestock or agricultural holdings and varying exposure to wildlife depredation of those holdings.
The effect of these types of heterogeneity on successful conservation collective action is understudied, particularly in the case of risk heterogeneity. This lacuna limits policymakers' ability to effectively match the design of community‐based programs to their particular settings.
Using established behavioural experimental techniques, we model the incentive structures underlying community‐based wildlife conservation where actors differ in wealth and exposure to human–wildlife conflict. We conduct a modified binary linear voluntary contribution mechanism game, in which we vary subject endowments and risk of incurring a loss when participating in collective action and we find that the type of heterogeneity matters to collective action success.
On their own, the presence of either economic or risk heterogeneities (but not both) dampen cooperation compared with homogeneous groups, as do ‘balanced’ distributions of both heterogeneities (where individuals facing high risk levels receive high endowments and vice versa). However, groups with ‘unbalanced’ heterogeneities (where those facing high risk levels receive low endowments and vice versa) demonstrate cooperation at similar levels to that of homogeneous groups.
At the individual level, risk drives cooperative behaviour, although its impact is influenced by relative wealth levels when both forms of heterogeneity are present.
These findings suggest the need for a more in‐depth look at the role and interaction of risk and wealth heterogeneities in conservation management.
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... These results are also consistent with the results of the study by Hofmeyr et a. (2007), who also did not find significant differences between the nominal contributions of low-income and high-income individuals. However, Seçilmiş and Güran (2012) came to the opposite conclusion. The results of their experiment showed that the income heterogeneity of participants had a statistically significant effect on the contributions to public goods and higher-income individuals contributed to the group account more than low-income individuals. ...
... Consequently, with punishment, low-benefit members did not benefit from being part of a privileged group. Secilmis & Gü ran [115] studied the effects of differences in endowment. They observed higher average contributions in egalitarian groups. ...
I review the theoretical and experimental literature on the collective action problem in groups whose members differ in various characteristics affecting individual costs, benefits and preferences in collective actions. I focus on evolutionary models that predict how individual efforts and fitnesses, group efforts and the amount of produced collective goods depend on the group’s size and heterogeneity, as well as on the benefit and cost functions and parameters. I consider collective actions that aim to overcome the challenges from nature or win competition with neighbouring groups of co-specifics. I show that the largest contributors towards production of collective goods will typically be group members with the highest stake in it or for whom the effort is least costly, or those who have the largest capability or initial endowment. Under some conditions, such group members end up with smaller net pay-offs than the rest of the group. That is, they effectively behave as altruists. With weak nonlinearity in benefit and cost functions, the group effort typically decreases with group size and increases with within-group heterogeneity. With strong nonlinearity in benefit and cost functions, these patterns are reversed. I discuss the implications of theoretical results for animal behaviour, human origins and psychology. © 2015 The Author(s) Published by the Royal Society. All rights reserved.
How does economic inequality relate to prosocial behaviour? Existing theories and empirical studies from multiple disciplines have produced mixed results. Here we conduct a systematic review and meta-analysis to systematically synthesize empirical studies. Results from 192 effect sizes and over 2.5 million observations in 100 studies show that the relationship varies from being negative to positive depending upon the study (95% prediction interval −0.450 to 0.343). However, on average, there is a small, negative relationship between economic inequality and prosocial behaviour (r = −0.064, P = 0.004, 95% confidence interval −0.106 to −0.021). There is generally no evidence that results depend upon characteristics of the studies, participants, the way prosocial behaviour and inequality were assessed, and the publication discipline. Given the prevalence of economic inequality and the importance of prosocial behaviour, this systematic review and meta-analysis provides a timely study on the relationship between economic inequality and prosocial behaviour.
We experimentally study the impact of inequality on the effectiveness of contests for funding public goods in a development context. We observe that the typical result of a lottery funding mechanism leading to greater funding for the public good than predicted by theory extends to groups with inequality. However, while theory suggests that increased inequality should lower total contributions to a lottery funded public good, we observe the opposite pattern. This result differs from prior results for the standard voluntary contribution mechanism where increased inequality has been found to reduce public good provision. Moreover, we find that the poor do not contribute a greater share of their endowment to the public good than do the wealthy. Thus, overall our study demonstrates the potential for community development projects, when funded with a lottery mechanism, to be highly successful even in the presence of inequality and may facilitate a progressive redistribution of wealth.
Purpose
The purpose of this paper is to examine the influence of income inequality on cooperative propensities, and thus the ability of individuals to resolve collective action dilemmas.
Design/methodology/approach
The paper presents a meta-study of 32 developing country lab experiments correlating cooperative behaviour with prevailing Gini coefficients. Furthermore, the paper conducts standard dictator- and public goods game (PGG) experiments with culturally and demographically similar subject pools in two West African countries characterized by high and persistent variation in national income inequality.
Findings
The meta-study findings of a significant negative relationship between income inequality and contribution levels in the PGG are corroborated by the own laboratory experimental findings that participants in more unequal Nigeria are significantly less altruistic and exhibit significantly lower propensities to cooperate than their more egalitarian Ghanaian counterparts. Moreover, the latter findings are robust when controlling for personal income levels.
Practical implications
The findings have nontrivial implications for collective action theorists and practitioners seeking to elicit tacit cooperation in developing countries.
Originality/value
The major contributions of this paper are the novel meta-analysis and the first attempt to examine the influence of personal income levels on cooperative behaviour in societies characterized by differential levels of income inequality.
We model and experimentally investigate effort levels in team production as a public good game with heterogeneous remuneration. In a hierarchically organized firm, team leaders (allocators) determine the effort levels of all team members. When the allocator receives equal payment or twice as much as the other workers, this results in the same team production, but when the allocator receives only half of what the other workers receive, team production is diminished.