Public goods provision in complex contexts: Does inequality matter when contributors are revealed?

This paper experimentally examines the question of how inequality in wealth affects contributions to public goods in a setting where contributors observe each other’s actions. The results show that in the context where contributors are observed, inequality reduces public goods funding, but only in the case of extreme inequality. At least nominally, for low to medium levels of inequality, the opposite is observed: total contributions to public goods is higher in low to medium levels of inequality. At the subject level, rich subjects significantly increased their contributions to public goods relative to contributions observed in equality. However, as inequality gets even higher, the rich kept their contributions at the level observed in equality. These findings contrast with prior studies in anonymous settings where a uniformly negative relationship between inequality and contributions is generally observed. This paper develops an economic theory integrating inequality and social image concerns, which contextualizes and corroborates the experimental results.