Inequality and Fairness: A Networked Experiment

Why do humans cooperate? Lab experiments have found that cooperation may emerge in part because humans have intrinsically egalitarian motives, meaning that they resist inequality even at some personal cost. But outside the lab, economic inequality is high and on the rise, yet survey data suggest that people do not prioritize policies intended to address inequality. If people are intrinsically egalitarian, why are dramatic increases in inequality not a bigger concern? One possibility is that most people care more about unfairness than inequality per se. Here, we report the results of a networked, online experiment designed to unpack the relationship between fairness and inequality. In our experiment, we create fair and unfair wealth allocations by experimentally manipulating two factors: wealth distribution (i.e., whether starting wealth is equal vs unequal) and wealth source (i.e., the specific mechanism through which wealth (in)equality comes about, earned vs random). Our results show that the source of subjects’ wealth has important effects on their attitudes and behavior: when subjects “earned” their endowments, they perceived their wealth regimes to be more fair, and they were less likely to cooperate. These findings suggest that it can be misleading to study inequality without accounting for subjects’ understanding of how that inequality arose.