Inequality and Visibility of Wealth in Experimental Social Networks
Abstract
Humans prefer relatively equal distributions of resources 1–5, yet societies have varying degrees of economic inequality. To investigate some of the possible determinants and consequences of inequality, here we perform experiments involving a networked public goods game in which subjects interact and gain or lose wealth. Subjects (n 5 1,462) were randomly assigned to have higher or lower initial endowments, and were embedded within social networks with three levels of economic inequality (Gini coefficient 0.0, 0.2, and 0.4). In addition, we manipulated the visibility of the wealth of network neighbours. We show that wealth visibility facilitates the downstream consequences of initial inequality—in initially more unequal situations, wealth visibility leads to greater inequality than when wealth is invisible. This result reflects a heterogeneous response to visibility in richer versus poorer subjects. We also find that making wealth visible has adverse welfare consequences, yielding lower levels of overall cooperation, inter-connectedness, and wealth. High initial levels of economic inequality alone, however, have relatively few deleterious welfare effects.
Authors
Bibliography
A. Nishi, H. Shirado, D. G. Rand, and N. A. Christakis, “Inequality and Visibility of Wealth in Experimental Social Networks,” Nature, (Sep 2015) DOI: 10.1038/nature15392
Download Publication
- MS163
- Supplement
- Editorial: Behavioural economics: Visible inequality breeds more inequality
- Editorial: Money matters. It is not how much people have, it is how much we know they have that stokes inequality.
Code
Other Publications in Experiments with Online Networks
- Collective Communication and Behaviour in Response to Uncertain “Danger” in Network Experiments
- Locally Noisy Autonomous Agents Improve Global Human Coordination in Network Experiments
- Quality Versus Quantity of Social Ties in Experimental Cooperative Networks
- Dynamic Social Networks Promote Cooperation in Experiments with Humans
- Static Network Structure Can Stabilize Human Cooperation
This entry is tagged with:
