Ruling the Roost: The Vicious Circle and the Emergence of Pecking Order

58 Pages Posted: 27 Feb 2023

See all articles by Robert Akerlof

Robert Akerlof

University of Warwick - Department of Economics

Hongyi Li

UNSW Australia Business School, School of Economics

Jonathan Yeo

Nanyang Technological University

Date Written: November 7, 2022

Abstract

This paper constructs a new game—the “rule-the-roost game”—where players compete repeatedly for power (“chickens”) and wealth (“eggs”) in the laboratory. We find that a vicious circle develops where the powerful accumulate more power and wealth over time, leading to substantial inequality. At the same time, the powerless take actions to oppose the powerful, which meaningfully reduces inequality. Gender differences are small in early rounds of the game but grow over time. The ratio of the female win rate to the male win rate declines by 1.3 percent each round, or 37.7 percent over the entire game. We argue that the growing difference is due to the vicious circle, which compounds the effects of small style-of-play differences. These findings suggest that gender imbalances may be particularly large in contexts such as firms where men and women interact repeatedly.

Keywords: power, inequality, hierarchy, gender differences

JEL Classification: D02, D31, D72, J16, O10

Suggested Citation

Akerlof, Robert and Li, Hongyi and Yeo, Jonathan, Ruling the Roost: The Vicious Circle and the Emergence of Pecking Order (November 7, 2022). UNSW Economics Working Paper 2023-03, Available at SSRN: https://ssrn.com/abstract=4371562 or http://dx.doi.org/10.2139/ssrn.4371562

Robert Akerlof

University of Warwick - Department of Economics ( email )

Coventry CV4 7AL
United Kingdom

Hongyi Li (Contact Author)

UNSW Australia Business School, School of Economics ( email )

High Street
Sydney, NSW 2052
Australia

Jonathan Yeo

Nanyang Technological University ( email )

HSS 04-53, 14 Nanyang Drive
Singapore
Singapore
637332 (Fax)

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