CeDEx Seminar - Michalis Drouvelis (University of Birmingham)

Cooperation and income inequality: a cross-cultural experiment

We experimentally investigate the impact of merit- and luck-based inequalities on cooperative behavior, beliefs, and social norms across different societies. Using a large sample from non-student populations (N=1,117) in Germany, Mexico, Egypt, and the US, we examine behavior in one-shot public good games under two conditions: income is randomly allocated (“Luck”) or performance dependent (“Merit”). First, we find that merit-based groups exhibit significantly less cooperation compared to luck-based groups only in the US sample. Second, this decline in contributions within the US is driven by the rich, who contribute less under merit-based inequality compared to luck-based inequality. Third, the behavior of the rich can be explained by their beliefs and social norms. These findings suggest that the sources of inequality may influence cooperative behavior in ways that are shaped by cultural contexts.