Local Competition Amplifies the Corrosive Effects of Inequality

23 Pages Posted: 24 Jul 2017 Last revised: 3 Oct 2017

See all articles by DB Krupp

DB Krupp

Queen's University

Thomas R. Cook

Federal Reserve Bank of Kansas City

Date Written: July 2, 2017

Abstract

Inequality is widely believed to incite conflict, but causal evidence is scarce. In a mathematical model and an experiment with 1205 human players, we study the effects of inequality and the spatial scale of competition on the evolution of conflict. We show that inequality of outcomes increases belligerent behaviour, destroys wealth, and engenders risk-taking. Crucially, these effects are amplified by local competition—the extent to which individuals compete exclusively with their social partners for fitness (or proxies thereof). Thus, inequality is at its most damaging when it arises between close competitors. More broadly, our work demonstrates that the scale of competition regulates the effects of inequality on conflict, which helps to explain the distribution of violence across different levels of social organisation.

Keywords: Inequality, scale of competition, local competition, conflict, risk-taking

Suggested Citation

Krupp, Daniel and Cook, Thomas R., Local Competition Amplifies the Corrosive Effects of Inequality (July 2, 2017). Available at SSRN: https://ssrn.com/abstract=3005961 or http://dx.doi.org/10.2139/ssrn.3005961

Daniel Krupp (Contact Author)

Queen's University ( email )

Kingston, Ontario K7L 3N6
Canada

HOME PAGE: http://www.saltlab.org

Thomas R. Cook

Federal Reserve Bank of Kansas City ( email )

1 Memorial Dr.
Kansas City, MO 64198
United States

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