Inequality, communication, and the avoidance of disastrous climate change in a public goods game - PubMed (original) (raw)

Inequality, communication, and the avoidance of disastrous climate change in a public goods game

Alessandro Tavoni et al. Proc Natl Acad Sci U S A. 2011.

Abstract

International efforts to provide global public goods often face the challenges of coordinating national contributions and distributing costs equitably in the face of uncertainty, inequality, and free-riding incentives. In an experimental setting, we distribute endowments unequally among a group of people who can reach a fixed target sum through successive money contributions, knowing that if they fail, they will lose all their remaining money with 50% probability. In some treatments, we give players the option to communicate intended contributions. We find that inequality reduces the prospects of reaching the target but that communication increases success dramatically. Successful groups tend to eliminate inequality over the course of the game, with rich players signaling willingness to redistribute early on. Our results suggest that coordination-promoting institutions and early redistribution from richer to poorer nations are both decisive for the avoidance of global calamities, such as disruptive climate change.

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Conflict of interest statement

The authors declare no conflict of interest.

Figures

Fig. 1.

Fig. 1.

Success rate in avoiding dangerous climate change. The lower two treatments are symmetrical, and the upper two are asymmetrical. The blue sections of the bars indicate the % of successful groups, whereas the gray sections indicate the corresponding failures (with red contours for the treatments with communication). (Insets) For both group classes, the average investments (inclusive of the €36 collected in the first three rounds) and SDs are shown. Only in Pledge was the outcome somewhat close to the rational prediction of all groups reaching the target (n = 10; P = 0.082, binomial test). Further analyses are available in

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.

Fig. 2.

Fig. 2.

Departure from announced contributions and its link to success. The probability that a player belongs to a successful group decreases with the contribution-pledge gap, i.e., with the differences between cumulative contributions and the corresponding amounts pledged both early (rounds 4–10, Probit; P = 0.002) and later (rounds 8–10, Probit; P = 0.032) in the game. All regressions have group-cluster robust SEs to take into account outcome interdependence among participants; regression tables and marginal effects interpretation are provided in

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. (A and B) Link between success and adherence to the initial pledge is visually confirmed. For the groups that provided the public good (A), the contribution-pledge gap is tighter than for the unsuccessful ones (B), as indicated by the dispersion around the bisector. Similarly for the second pledge, greater clustering around the bisector takes place in C than in D. A small random noise (5%) has been inserted to make all data points visible.

Fig. 3.

Fig. 3.

Relative share of the total contributions taken up by players with different endowments, depending on which group they belong to. (A) In successful groups partaking of the treatments with unequal endowments (Base-Unequal and Pledge-Unequal), the rich compensated the poor by investing more in the active rounds and equalized cumulative contributions over the entire game at approximately €20. (B) In failing groups, such wealth redistribution did not take place to the same extent. The initial gap of €12 between the rich and poor was not fully offset because the former invested, on average, €12.83 each over the entire game (collectively contributing ∼40% of the €93 provided), whereas the poor invested €18.17 (collectively contributing ∼60% of €93).

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