Arbeitspapier

Fairness and Inequality in Institution Formation

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A key solution for public good provision is the voluntary formation of institutions that commit players to cooperate. Such institutions generate inequality if some players decide not to participate but cannot be excluded from cooperation benefits. Prior research with small groups emphasizes the role of fairness concerns with positive effects on cooperation. We show that effects do not generalize to larger groups: if group size increases, groups are less willing to form institutions generating inequality. In contrast to smaller groups, however, this does not increase the number of participating players, thereby limiting the positive impact of institution formation on cooperation.

Language: Englisch

Bibliographic citation: Series: IZA Discussion Papers ; No. 16464

Classification: Wirtschaft
Design of Experiments: Laboratory, Group Behavior
Institutions: Design, Formation, Operations, and Impact
Equity, Justice, Inequality, and Other Normative Criteria and Measurement
Public Goods

Subject: institution formation
group size
social dilemma
social preferences

Event: Geistige Schöpfung

(who): Detemple, Julian
Kosfeld, Michael

Event: Veröffentlichung

(who): Institute of Labor Economics (IZA)

(where): Bonn

(when): 2023

Handle: http://hdl.handle.net/10419/282591

Last update: 10.03.2025, 11:43 AM CET

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Object type

Arbeitspapier

Associated

Detemple, Julian
Kosfeld, Michael
Institute of Labor Economics (IZA)

Time of origin

2023

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