Humans prefer relatively equal distributions of resources1,2,3,4,5, yet societies have varying degrees of economic inequality6. To investigate some of the possible determinants and consequences of inequality, here we perform experiments involving a networked public goods game in which subjects interact and gain or lose wealth. Subjects (n = 1,462) were randomly assigned to have higher or lower initial endowments, and were embedded within social networks with three levels of economic inequality (Gini coefficient = 0.0, 0.2, and 0.4). In addition, we manipulated the visibility of the wealth of network neighbours. We show that wealth visibility facilitates the downstream consequences of initial inequality—in initially more unequal situations, wealth visibility leads to greater inequality than when wealth is invisible. This result reflects a heterogeneous response to visibility in richer versus poorer subjects. We also find that making wealth visible has adverse welfare consequences, yielding lower levels of overall cooperation, inter-connectedness, and wealth. High initial levels of economic inequality alone, however, have relatively few deleterious welfare effects.
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We thank C. Apicella, D. G. Alvarez, A. A. Arechar, D. Bergemann, G. Iosifidis, J. Jordan, J. H. Fowler, O. Moav, and A. Zaslavsky for comments. M. McKnight provided expert programming assistance and P. Treut provided technical support. The data reported in this paper are archived at Yale Institute for Network Science and are available upon request. A.N. was supported by the Japan Society for the Promotion of Science (JSPS). Support for this research was provided by a grant from the Robert Wood Johnson Foundation.
Extended data figures
Extended data tables
Visibility of neighbours' wealth reduces cooperation, interconnectedness, and wealth (bottom two), and visibility leads to greater inequality especially in initially more highly unequal setting (bottom right).
The states from round 0 (before interactions start) to round 10 (after they end) in 4 out of 80 sessions are shown. The bold frame of a node indicates the “visible” condition and otherwise the “invisible” condition Node size (area) indicates wealth. The letter in the node denotes the initial wealth to which subjects were randomly assigned: N is a non-poor/non-rich subject, P is an initially poor subject, and R is an initially rich subject. Gini represents the Gini coefficient. Node colours represent the last move (blue: cooperate, red: defect, grey: no history).