Topi Miettinen

Title: Does Inequality Affect Altruism, Trust, and Cooperation? An Information Experiment with Register Data

Abstract: We investigate the impact of information about relative income differences on trust, trustworthiness, altruism, cooperation, and on beliefs about these other-regarding behaviors, using an online artefactual field experiment with more than 3,800 participants drawn from the Finnish population, conducted in collaboration with Statistics Finland. In our treatment (but not in control), participants are informed of their own rank in the disposable income distribution and of the income level of the individuals they interact with. We then let them interact in a series of incentivized games to examine the effect of information about income differences, as measured by differences in real-world income rank, on social preferences in a between- and within-subjects design. We find that information about relative income reduces trust, trustworthiness, altruism, and cooperation.  We also find that beliefs about all other-regarding behaviors are much more pessimistic than actual behavior irrespective of whether information is provided or not, but they nevertheless correctly predict the income level gradient. The behavioral responses to relative income information are consistent with inequality aversion: participants are more generous, trustworthy and trusting toward lower-income counterparts and less so toward higher income ones, relative to a no-information baseline. The top 10% income group trust and trustworthiness are fairly unresponsive to incomes of others.