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Growth and inequality in public good provision

Gächter, Simon and Mengel, Friederike and Tsakas, Elias and Vostroknutov, Alexander (2017) 'Growth and inequality in public good provision.' Journal of Public Economics, 150. 1 - 13. ISSN 0047-2727

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Abstract

In a novel experimental design, we study public good games with dynamic interdependencies, where each agent's wealth at the end of period t serves as her endowment in t + 1. In this setting, growth and inequality arise endogenously allowi ng us to address new questions regarding their interplay and effect on cooperation. We find that amounts contributed are increasing over time even in the absence of punishment possibilities. Variation in wealth is substantial with the richest groups earning more than ten times what the poorest groups earn. Introducing the possibility of punishment does not increase wealth and in some cases even decreases it. In the presence of a punishment option, inequality in early periods is strongly negatively correlated with group income in later periods, highlighting negative interaction effects between endogenous inequality and punishment.

Item Type: Article
Uncontrolled Keywords: Public goods, Inequality, Growth, Experiment, Cooperation, Free riding, Punishment
Subjects: H Social Sciences > H Social Sciences (General)
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Friederike Mengel
Date Deposited: 10 Mar 2017 09:45
Last Modified: 07 Feb 2020 16:15
URI: http://repository.essex.ac.uk/id/eprint/19315

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