Voting for the distribution rule in a Public Good Game with heterogeneous endowments

Voting for the distribution rule in a Public Good Game with heterogeneous endowments This paper analyzes the impact of inequality in the distribution of endowments on cooperation. We conduct a lab experiment using a dynamic Public Good Game to test this relation. We introduce the possibility of choosing among three different redistribution rules: Equidistribution, Proportional to contribution and Progressive to endowment. This novelty in a dynamic environment allows us to analyze how the inequality within groups changes according to individual choices and to investigate if players show inequity averse preferences. Results show that inequality has a negative impact on individual contribution. Players act in order to reduce the initial exogenous inequality. Indeed, in the Treatment with the highest level of inequality, agents vote for reducing the endowment heterogeneity. Moreover, individual contribution is strongly influenced by others’ contributions. Journal of Economic Interaction and Coordination Springer Journals

Voting for the distribution rule in a Public Good Game with heterogeneous endowments

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Springer Berlin Heidelberg
Copyright © 2016 by Springer-Verlag Berlin Heidelberg
Economics; Economic Theory/Quantitative Economics/Mathematical Methods; Computer Appl. in Social and Behavioral Sciences; Theoretical, Mathematical and Computational Physics; Finance, general
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