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Dynamism of investment: wealth visibility facilitates economic mobility

Author

Listed:
  • Kazumi Shimizu

    (Waseda University)

  • Yoshio Kamijo

    (Waseda University)

  • Hiroki Ozono

    (Kagoshima University)

  • Akira Goto

    (Meii University)

Abstract

Although the impact of wealth disparity on choices regarding risky investments is a pressing issue in modern society, experimental or theoretical studies focusing on this issue remain scarce. In the present study, we examine how the increasing visibility of others’ wealth, which is accelerated by information technology and financialization of the economy, affects people’s investment behavior, wealth accumulation, and economic mobility. To do so, we design an economic experiment with the investment (private goods provision) game and conduct a structural estimation based on a learning model. We have two main findings. First, low-ranked people (i.e., the poor) are more likely to invest when the wealth distribution of others is visible than when it is not. Second, active investment enables people to move frequently in the economic hierarchy and decreases wealth disparity.

Suggested Citation

  • Kazumi Shimizu & Yoshio Kamijo & Hiroki Ozono & Akira Goto, 2025. "Dynamism of investment: wealth visibility facilitates economic mobility," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 20(4), pages 895-924, October.
    • Handle: RePEc:spr:jeicoo:v:20:y:2025:i:4:d:10.1007_s11403-025-00442-6
    DOI: 10.1007/s11403-025-00442-6
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