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Equality concerns and the limits of self-governance in heterogeneous populations

Author

Listed:
  • Marie Claire Villeval

    (GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne - ENS de Lyon - École normale supérieure de Lyon - Université de Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet - Saint-Étienne - CNRS - Centre National de la Recherche Scientifique)

Abstract

Mechanisms to overcome social dilemmas provide incentives to maximize efficiency. However, often – such as when agents are heterogeneous – there is a trade-off between efficiency and equality. Agents' concerns for equality in such instances can limit the ability of mechanisms to promote efficiency. We provide evidence for this from a public good experiment using a simple mechanism which allows individuals to communicate periodically with other group members and reward them for their actions. We show that, in homogeneous populations – where there is no tension between efficiency and equality – the mechanism permits group to obtain maximum efficiency. This is not the case in heterogeneous populations where individuals derive different benefits from cooperation. Although almost all heterogeneous groups agree to follow specific contribution rules with positive contributions, most of them either prioritize equality over efficiency or strike a compromise between the two. These findings suggest that equality concerns can impose limits on the ability of heterogeneous populations to reach efficient outcomes through self-governance.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Marie Claire Villeval, 2016. "Equality concerns and the limits of self-governance in heterogeneous populations," Post-Print halshs-01302533, HAL.
  • Handle: RePEc:hal:journl:halshs-01302533
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    Cited by:

    1. is not listed on IDEAS
    2. Gabriele Camera & Cary Deck & David Porter, 2020. "Do economic inequalities affect long-run cooperation and prosperity?," Experimental Economics, Springer;Economic Science Association, vol. 23(1), pages 53-83, March.
    3. Gabriele Camera & Cary Deck & David Porter, 2019. "Do Economic Inequalities Affect Long-Run Cooperation & Prosperity?," Working Papers 19-09, Chapman University, Economic Science Institute.
    4. Sheheryar Banuri & David Bulman & Luis F. Lopez-Calva & Ezequiel Molina & Abla Safir & Siddharth Sharma, 2017. "The Governance Game," World Bank Publications - Reports 26085, The World Bank Group.
    5. Fatas, Enrique & Restrepo-Plaza, Lina & Banuri, Sheheryar, 2024. "A simple twist of fate. An experiment on election uncertainty and democratic institutions," Journal of Economic Behavior & Organization, Elsevier, vol. 225(C), pages 272-289.
    6. Dekel, Sagi & Fischer, Sven & Zultan, Ro’i, 2017. "Potential Pareto Public Goods," Journal of Public Economics, Elsevier, vol. 146(C), pages 87-96.
    7. Gabriele Camera & Cary Deck & David Porter, 2016. "Do Economic Inequalities Affect Long-Run Cooperation?," Working Papers 16-18, Chapman University, Economic Science Institute.
    8. He, Haoran & Villeval, Marie Claire, 2017. "Are group members less inequality averse than individual decision makers?," Journal of Economic Behavior & Organization, Elsevier, vol. 138(C), pages 111-124.

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    Keywords

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    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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