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At the Root of the North-South Cooperation Gap in Italy: Preferences or Beliefs?

Quaderni - Working Paper DSE N° 1092

38 Pages Posted: 14 Jan 2017  

Maria Bigoni

University of Bologna - Department of Economics

Stefania Bortolotti

University of Cologne - Faculty of Management, Economics and Social Sciences; University of Bologna - Department of Economics

Marco Casari

University of Bologna - Department of Economics

Diego Gambetta

University of Oxford

Date Written: January 11, 2017

Abstract

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

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

Maria Bigoni (Contact Author)

University of Bologna - Department of Economics ( email )

Piazza Scaravilli 2
Bologna, Bologna 40126
Italy
+390512098134 (Phone)

HOME PAGE: http://https://www.unibo.it/sitoweb/maria.bigoni/en

Stefania Bortolotti

University of Cologne - Faculty of Management, Economics and Social Sciences ( email )

Richard-Strauss-Str. 2
Cologne, D-50923
Germany

University of Bologna - Department of Economics ( email )

Strada Maggiore 45
Bologna, 40125
Italy

Marco Casari

University of Bologna - Department of Economics ( email )

Strada Maggiore 45
Bologna, 40125
Italy

Diego Gambetta

University of Oxford ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

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