Heterogeneity, Inequity Aversion, and Group Performance.
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ABSTRACT:
SUBMITTER: Kolle F
PROVIDER: S-EPMC5772919 | biostudies-literature | 2016 Feb
REPOSITORIES: biostudies-literature
Publications
Heterogeneity, Inequity Aversion, and Group Performance.
Kölle Felix F Sliwka Dirk D Zhou Nannan N
Social choice and welfare 20150828 2
We investigate the effects of inequality in wealth on the incentives to contribute to a group output when agents are inequity averse and may differ in ability. We show that equality may lead to a reduction of contributions below levels generated by purely selfish agents. But introducing inequality motivates more productive agents to exert higher efforts and help the group to coordinate on equilibria with less free-riding. As a result, less able agents may benefit from initially disadvantageous i ...[more]
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