323 Visibility of Wealth & Social Cooperation

Researched by Nishi, Akihiro., Shirado, Hirokazu., Rand, David., & Christakis, Nicholas. A. (2015).

Written by Bethany Wellman, M.S.

We value equality but our economy has great disparity. What influences inequality?

Yale researchers divided 1500 participants into groups who played a cooperation game. Each round, individuals could choose to cooperate by reducing their wealth so to increase the wealth of all, or defect by paying nothing and providing no benefits. Individuals were informed of the choices made by their neighbors and were given the option to change neighbors. They were randomly assigned to one of three conditions:

1.No initial inequality: each started with the same monetary amount.

2.Initial wealth inequality: ‘rich’ subjects received a larger amount than ‘poor’ subjects.

3.Visibility of their neighbors’ wealth condition: either subjects only knew their own wealth or subjects could see both their own and their neighbors’ wealth.

Results indicate that in unequal situations, wealth visibility leads to greater inequality than when wealth is invisible. Making wealth visible leads to less overall cooperation, inter-connectedness, and wealth. Inequality alone has little effect on cooperation, interconnectedness or overall wealth accumulation. Thus, it is not inequality per se that is so problematic, but rather visibility that adversely affects cooperation.

Remember, displaying wealth, reduces other’s cooperation and increases disparities.

Reference:

Nishi, A., Shirado, H., Rand, D., & Christakis, N. A. (2015). Inequality and visibility of wealth in experimental social networks. Nature, 526, 426-429.