Risk And Inequality Aversion In Social Dilemmas

The authors experimentally investigate cooperative behaviour in a social dilemma situation, where the socially efficient outcome may be encouraged by risk aversion and/or inequality aversion. The first part of this experiment is devoted to the elicitation of subjects' aversion profile, taking care not to confuse the two dimensions. Subjects are then grouped by three according to their aversion profiles, and they interact in a repeated social dilemma game. In this game, agents are characterised by a social status so that the higher the agent's status, the higher her earnings.