The Effect of Economic Inequality on Individuals' Cooperative Behavior Using an Economic Experiment

Abstract

In this study we tested whether economic inequality and democratic choices affected individuals' cooperative behavior. We expected two main effects: First one of inequality on cooperation and another of democratic choice on cooperation. We used the public goods game (N = 479), in which participants were given a certain number of tokens and decided how many they wanted to keep in their private fund and how many they wanted to share in the public goods. To manipulate economic inequality, we distributed participants’ initial tokens either equally, unequally or very unequally. To manipulation democratic choice, we presented a prescriptive norm to punish the free-riders, either chosen by the participants or imposed. Cooperative behavior was measured by the number of tokens that participants invested in the public goods ark. A mix design was used, including one between participants manipulated factor (democratic choice) and another one manipulated within participants (inequality distribution). As predicted, our findings showed a significant difference between the high and the low inequality condition on cooperative behavior. Participants cooperate with more tokens in the low (vs. high) inequality condition. However, when the prescriptive norm was introduced, this difference between inequality conditions disappeared. No differences in cooperation were found when the prescriptive norm was either democratically voted or imposed. Our findings showed evidence about the reduction of cooperation in unequal contexts. Additionally, prescriptive norms could reduce differences in cooperative behavior independently of inequality levels. The results show that the study of prescriptive norms could contribute to foment redistribution and tax compliance.

Keywords

• economic inequality
• democracy premium
• cooperation
• public goods game
• prescriptive norms