Inequality, Decisions, and Altruism (original) (raw)
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Journal of Theoretical Politics, 2012
Past models treat economic inequality as an exogenous condition that can provide individuals a dominant incentive to produce collective goods unilaterally. Here, we part with that tradition so as (i) to treat economic inequality and collective action as endogenous, and (ii) to examine whether economic inequality can foster collective action even when all individuals can gain from free-riding. Using evolutionary game theory and computer simulations, we study whether cooperation can evolve when agents play multiple, one-shot PD games per generation and employ strategies that condition cooperative play on their game partners' wealth holdings. In this game environment, we find that collective action succeeds via a strategy in which players choose to cooperate when joining a PD with an economic equal and they defect when partnered with a player possessing wealth holdings unequal to their own. This strategy succeeds at producing cooperation because wealth disparities provide information about players' PD strategies, thus allowing prospective cooperators to avoid free-riders and to aim cooperation at players who will reciprocate it. Moreover, cooperating with economic equals remains robust even in the presence of errors that degrade the information conveyed by wealth disparities. These results signal an alternative avenue through which economic inequality can influence the viability of collective action.
Class Altruism and Redistribution
SSRN Electronic Journal, 2018
Why do tax rates vary so much across countries? We study the role of other-regarding preferences and ethnic fragmentation in redistribution. A government is elected by altruistic voters and chooses a redistributive income tax. Altruism is directed towards social identity groups. Three main factors yield low levels of redistribution: (i) strong in-group altruism among rich voters-referred to as class altruism; (ii) weak universal altruism-in particular among the rich; and (iii) ethnic fragmentation among poor voters. We document survey evidence that the pattern of altruism in the United States and the European Union is consistent with the observed differences in taxes.
Segregating socioeconomic classes leads to an unequal redistribution of wealth
Palgrave Communications
Social living groups are organised in social hierarchies often exhibiting inequalities in beings. Investigating class segregation and the use of punishment applied downward in the rank acts as a key aspect to ascertain how dominant and subordinate partners cooperate to achieve mutual profit. In human subjects coming from countries with an uneven wealth distribution, this mutual profit may be reduced, especially for the lower socioeconomic classes. We implemented an Iterated Prisoner’s Dilemma Game experiment in one such country with starkly high inequality, China. We split relatively richer and poorer subjects into separate classes and gave only one the authority to punish the other. When rich subjects could unidirectionally punish poor subjects (as in a segregated society), rich subjects decreased their cooperation effort while punishing poor subjects. When rich and poor subjects, instead, could punish each other in random combinations (as in an integrated society) they decreased d...
Socio-economic inequality and altruism
Revista Amazonia Investiga
The article addresses the attitudes to inequality in the Russian society depending on the role of the individual in a reference group. It is shown that people are ready to accept significant income inequality if they believe that the income is well earned. No correlation was found between subjective well-being and inequality. The vast majority of people compare themselves with friends, neighbours and relatives. The next most important reference group is colleagues, followed by celebrities. The rejection of representatives of lower social classes is negatively correlated with life satisfaction. At the same time, the respondents expressed willingness to build a society where, having due means, people would organise help to those who cannot provide for themselves.
Community and class antagonism
Journal of Public Economics, 2007
We investigate how vertical unity within a community interacts with horizontal class divisions of an unequal income distribution. Community is conceptualized in terms of a public good to which all those in the community have equal access, but from which outsiders are excluded. We formulate the idea of redistributive tension, or class antagonism, in terms of the costs that poorer individuals would be willing to impose on the rich, to achieve a given gain in personal income. Our conclusion is that the nominal distribution of income could give a misleading picture of tensions in society, both within and across communities. Ideologies of community solidarity may well trump those of class solidarity because of the implicit sharing of community resources brought about by community-specific public goods. Greater economic mobility of particular types may actually exacerbate class tensions instead of attenuating them. We illustrate our theoretical results with a discussion of a number of historical episodes of shifting class tensions and alliances.
The Altruistic Rich? Inequality and Other-Regarding Preferences for Redistribution
2014
Why is the difference in redistribution preferences between the rich and the poor high in some places and low in others? In this paper we argue that it has a lot to do with the rich and very little to do with the poor. We contend that while there is a gen-eral relative income effect on redistribution preferences, the preferences of the rich are highly dependent on the macro-level of inequality. The reason for this effect is not related to immediate tax and transfer considerations but to other-regarding con-cerns. Altruism is an important omitted variable in much of the Political Economy literature. While material self-interest is the base of most approaches to redistribu-tion (first affecting preferences and then politics and policy), there is a paucity of research on other-regarding concerns. Using data for the US from 1978 to 2010, we show that the rich in more unequal states are more supportive of redistribution than the rich in more equal states. In making these distinctions bet...
2001
We investigate how voluntary contributions to community-specific public goods affect (a) the relationship between inequality of incomes and inequality of welfare outcomes, and (b) individuals’ material incentives for supporting income redistribution. We show that the nominal distribution of income could give quite a misleading picture of real inequality and tensions in society, both within and between communities. We also analyze the impact of alternative patterns of income growth on welfare inequality, and show that, somewhat paradoxically, individuals sometimes have incentives for opposing redistribution programs from which they themselves stand to receive income increments. This arises because of the complicating role of public goods, and has strong implications for class and community solidarity.
Social Forces, 2018
Our understanding of cross-national differences in the relationship between social class location and voting choices has improved substantially in the last decade. Yet scholarship about cross-national and longitudinal variations in the relationship between class location and policy preferences remains neglected. This paper addresses this important gap in the literature through a comparative, longitudinal analysis of the substantial, cross-national variation of class differences in pro-redistribution attitudes. To explain this variation, we focus on the role of preexisting policies and engage with an ongoing debate in the policy feedbacks literature. The self-interest approach argues that higher redistribution creates the incentives among the upper classes to oppose redistribution, widening the class cleavage. By contrast, the normative approach argues that universal social policy regimes meet the fairness criteria of middle and upper classes, thereby reducing attitudinal differences. Using an innovative dataset containing 106 country-years between 1985 and 2010, our study supports the self-interest approach. Countries achieving more redistribution display larger class cleavages in pro-redistribution attitudes, while universalism does not reduce this divide. The study further shows that redistribution and class cleavage are linearly related, because redistribution bolsters the already low commitment with inequality reduction in the upper service and lower service classes.
Experimental Economics, 2017
We explore the relation between redistribution choices, source of income, and pre-redistribution inequality. Previous studies find that when income is earned through work there is less support for redistribution than when income is determined by luck. Using a lab experiment, we vary both the income-generating process (luck vs. performance) and the level of inequality (low vs. high). We find that an increase in inequality has less impact on redistribution choices when income is earned through performance than when income results from luck. This result is likely explained by individuals using income differences as a heuristic to infer relative deservingness. If people believe income inequality increases as a result of performance rather than luck, then they are likely to believe the poor deserve to stay poor and the rich deserve to stay rich.