Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/103525
Authors: 
Gächter, Simon
Mengel, Friederike
Tsakas, Elias
Vostroknutov, Alexander
Year of Publication: 
2014
Series/Report no.: 
IZA Discussion Papers 8504
Abstract: 
In a novel experimental design we study public good games with dynamic interdependencies. Each agent's income at the end of a period serves as her endowment in the following period. In this setting growth and inequality arise endogenously allowing us to address new questions regarding their interplay and effect on cooperation levels. In stark contrast to standard public good experiments, we find that contributions are increasing over time even in the absence of punishment possibilities. Inequality and group income are positively correlated for poor groups, but negatively correlated for rich groups. There is very strong path dependence: inequality in early periods is strongly negatively correlated with group income in later periods. These results give new insights into why people cooperate and should make us rethink previous results from the literature on repeated public good games regarding the decay of cooperation in the absence of punishment.
Subjects: 
public goods
inequality
growth
JEL: 
C92
H41
D63
Document Type: 
Working Paper

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