Good Samaritans in Networks: An Experiment on How Networks Influence Egalitarian Sharing and the Evolution of Inequality.

Abstract

The fact that the more resourceful people are sharing with the poor to mitigate inequality-egalitarian sharing-is well documented in the behavioral science research. How inequality evolves as a result of egalitarian sharing is determined by the structure of "who gives whom". While most prior experimental research investigates allocation of resources in dyads and groups, the paper extends the research of egalitarian sharing to networks for a more generalized structure of social interaction. An agent-based model is proposed to predict how actors, linked in networks, share their incomes with neighbors. A laboratory experiment with human subjects further shows that income distributions evolve to different states in different network topologies. Inequality is significantly reduced in networks where the very rich and the very poor are connected so that income discrepancy is salient enough to motivate the rich to share their incomes with the poor. The study suggests that social networks make a difference in how egalitarian sharing influences the evolution of inequality.