Quaderni - Working Paper DSE N° 1092
38 Pages Posted: 14 Jan 2017
Date Written: January 11, 2017
The marked difference in the development of the North and the South of Italy represents a prototypical case of seemingly intractable within-country disparities. Recent research found that a plausible determinant of this socio-economic gap would be a difference in the ability to cooperate. Through a laboratory experiment we investigate whence this difference derives, whether from different preferences or from different beliefs. Our findings indicate that Northerners and Southerners share the same individual pro-social preferences, and that the cooperation gap lies rather in the pessimistic beliefs that Southerners have about their cooperativeness. Southerners, furthermore, manifest a stronger aversion to social risk, as compared to the risk of nature. A policy implication is that an intervention or an event that reduced pessimistic beliefs would directly boost cooperation levels.
Keywords: Betrayal aversion, conditional cooperation, experiments, Italy
JEL Classification: C72, C93, Z13
Suggested Citation: Suggested Citation
Bigoni, Maria and Bortolotti, Stefania and Casari, Marco and Gambetta, Diego, At the Root of the North-South Cooperation Gap in Italy: Preferences or Beliefs? (January 11, 2017). Quaderni - Working Paper DSE N° 1092. Available at SSRN: https://ssrn.com/abstract=2898245 or http://dx.doi.org/10.2139/ssrn.2898245