Effort, Inequality and Cooperation: Evidence from the Lab
SERIES Working Papers N. 02/2018
23 Pages Posted: 3 May 2018
Date Written: April 2018
We investigate the impact of inequality on cooperation using a linear public good game and focusing on heterogeneity in the source of income, where some participants work for their endowment (“workers”) while others do not (“non-workers”). The key finding of our paper is that cooperation is higher when workers are grouped with other workers, and we provide evidence that the underlying mechanism for this result is a higher degree of altruism between workers. Our results thus lend support to the concerns that inequality may have detrimental effects on economic efficiency.
Keywords: public goods, inequality, source of income heterogeneity
JEL Classification: C92, H41, D63
Suggested Citation: Suggested Citation