No evidence of inequality aversion in the investment game

PLoS One. 2018 Oct 23;13(10):e0204392. doi: 10.1371/journal.pone.0204392. eCollection 2018.

Abstract

We report experimental evidence on second-movers' behavior in the investment game (also known as the trust game) when there exists endowment heterogeneity. Using a within-subject analysis, we investigate whether or not second-movers exhibit some taste for inequality aversion by returning a larger (smaller) share of the available funds to first-movers who are initially endowed with a lesser (larger) endowment, respectively. Our data suggest that second-movers do not take into consideration the level of endowments when making their decisions as their behavior is consistent across distribution of endowments; i.e., they return the same proportion of the available funds regardless of the endowments. We indeed find that some second-movers have a tendency to return what they have received from first-movers. In our data, there is also a substantial proportion of second-movers who are selfish and return nothing. (JEL Codes: C72, C91, D3, D63).

Publication types

  • Research Support, Non-U.S. Gov't

MeSH terms

  • Decision Making*
  • Games, Experimental
  • Humans
  • Interpersonal Relations*
  • Investments*
  • Models, Econometric
  • Social Behavior*
  • Socioeconomic Factors

Grants and funding

The author received funding for this work from the Ministerio de Economía y Competitividad under the project CO2017-87245-R. The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript.