Science Current Events | Science News | Brightsurf.com
 

A pinch of opportunity makes deep inequality more palatable

July 27, 2012
Just a tiny hint of opportunity has a disproportionately powerful effect - making unfairness more acceptable to disadvantaged people, new research has found.

A study by Eugenio Proto, an economist from the Centre for Competitive Advantage in the Global Economy (CAGE) at the University of Warwick and two other co-authors, looked at decision-making and how it was influenced by people's perceptions of fairness.

Researchers set up a game between two people where one person (the proposer) offers to split £10 between themselves and their partner, with the proposer able to decide the exact amount he or she is willing to offer.

If that amount is not accepted by to the second person (the responder) then neither gets any money.

Known as an ultimatum game, this kind of set-up is frequently studied by economists - but for the first time the CAGE experiment introduced an element of inequality via an increasingly-biased rigged lottery to decide who becomes the proposer, the stronger of the two positions.

It makes sense that when people see clear-cut unfairness, they are less likely to accept it - and this was shown in the results.

When the opportunity to become the proposer was 50 per cent - i.e completely fair - responders on average rejected an offer by the proposer of £2.15 or less.

And when the chance of becoming the proposer was rigged at 0 per cent - i.e complete inequality - responders rejected offers of £2.96 or less.

But when just a one per cent chance of becoming a proposer was introduced - i.e the lottery was still vastly rigged biased in the proposer's favour - responders rejected offers of £2.53 or less.

In other words the difference between having absolutely no chance and having just a one per cent chance was valued at 43p (£2.96 - £2.53) - proportionally much larger than the 38p value (£2.53 - £2.15) given to the gap between 1 and 50 per cent.

Dr Eugenio Proto, Associate Professor of Economics at the University of Warwick, said he was surprised to discover this quirk in human decision-making.

"When you look at it rationally, it makes no sense that people are placing such a disproportionate value on that first one per cent increase in opportunity.

"But that slight increase in fairness seems to have some kind of symbolic meaning.

"It appears people are happy to accept extreme inequality when they have this tiny carrot dangled in front of them.

"We've got to remember that our experiments are conducted in a lab at a university, not in the real world which is far more complex.

"But these results could shed light on why people living in unequal societies aren't more vocal in rejecting unfairness.

"It seems that even if people believe they have just the tiniest of chances to become the next Bill Gates, it's enough to keep them tolerant of obvious inequality."

Anirban Kar of the Delhi School of Economics, one of the other two co-authors, added: "It makes sense that when people see clear-cut unfairness in the system, they are more likely to reject an unequal outcome than if the same outcome was generated by a fair system.

"Participation in the system, surprisingly enough, even a symbolic one (a modicum of voice) seems to have a significant impact".

The research paper Everyone Wants a Chance: Initial Positions and Fairness in Ultimatum Games was co-authored with Gianluca Grimalda of Universitat Jaume I, Castelló in Spain and Anirban Kar of the Delhi School of Economics, University of Delhi.

University of Warwick


Related Inequality Current Events and Inequality News Articles


What's Your Status?
In western society, where keeping up with the Joneses - or, better yet, surpassing them - is expected and even encouraged, status matters.

Sesame Street teaches physicians a lesson
More than two million people are incarcerated in the United States, the highest incarceration rate in the world. So perhaps it comes as no surprise that last year the popular children's television series Sesame Street introduced a character that has an incarcerated father.

Non-citizens face harsher sentencing than citizens in US criminal courts
Non-Americans in the U.S. federal court system are more likely to be sentenced to prison and for longer terms compared to U.S. citizens, according to a new study.

Interactive website helps lower-income smokers to stop smoking
People with lower incomes attempting to quit smoking are 36% more likely to succeed if they use a new interactive website called 'StopAdvisor' than if they use a static information website, finds a randomised controlled trial led by UCL researchers.

Life, Liberty, and the Pursuit of Healthcare?
The Affordable Care Act - "Obamacare" - was signed into law in 2010 and promised the largest overhaul of the U.S. healthcare system since the 1960s.

Global shift away from cars saves US$100 trillion, eliminates 1,700 MT of CO2 pollution
More than $100 trillion in cumulative public and private spending, and 1,700 megatons of annual carbon dioxide (CO2)-a 40 percent reduction of urban passenger transport emissions-could be eliminated by 2050 if the world expands public transportation, walking and cycling in cities.

Three's a charm: NIST detectors reveal entangled photon triplets
Researchers at the University of Waterloo in Canada have directly entangled three photons in the most technologically useful state for the first time, thanks in part to superfast, super-efficient single-photon detectors developed by the National Institute of Standards and Technology (NIST).

Public Trust Has Dwindled With Rise in Income Inequality
Trust in others and confidence in societal institutions are at their lowest point in over three decades, analyses of national survey data reveal. The findings are forthcoming in Psychological Science, a journal of the Association for Psychological Science.

Rising risk of failed seasons as climate change puts pressure on Africa's farmers
Small-scale family farmers across Africa- already struggling to adapt to rapidly rising temperatures and more erratic rains-risk being overwhelmed by the pace and severity of climate change.

Modern population boom traced to pre-industrial roots
The foundation of the human population explosion, commonly attributed to a sudden surge in industrialization and public health during the 18th and 19th centuries, was actually laid as far back as 2,000 years ago, suggests an extended model of detailed demographic and archeological data.
More Inequality Current Events and Inequality News Articles

The Price of Inequality: How Today's Divided Society Endangers Our Future

The Price of Inequality: How Today's Divided Society Endangers Our Future
by Joseph E. Stiglitz (Author)


A forceful argument against America's vicious circle of growing inequality by the Nobel Prize–winning economist. America currently has the most inequality, and the least equality of opportunity, among the advanced countries. While market forces play a role in this stark picture, politics has shaped those market forces. In this best-selling book, Nobel Prize–winning economist Joseph E. Stiglitz exposes the efforts of well-heeled interests to compound their wealth in ways that have stifled true, dynamic capitalism. Along the way he examines the effect of inequality on our economy, our democracy, and our system of justice. Stiglitz explains how inequality affects and is affected by every aspect of national policy, and with characteristic insight he offers a vision for a more just and...

Capital in the Twenty-First Century

Capital in the Twenty-First Century
by Thomas Piketty (Author), Arthur Goldhammer (Translator)


What are the grand dynamics that drive the accumulation and distribution of capital? Questions about the long-term evolution of inequality, the concentration of wealth, and the prospects for economic growth lie at the heart of political economy. But satisfactory answers have been hard to find for lack of adequate data and clear guiding theories. In Capital in the Twenty-First Century, Thomas Piketty analyzes a unique collection of data from twenty countries, ranging as far back as the eighteenth century, to uncover key economic and social patterns. His findings will transform debate and set the agenda for the next generation of thought about wealth and inequality. Piketty shows that modern economic growth and the diffusion of knowledge have allowed us to avoid inequalities on...

Inequality: A Contemporary Approach to Race, Class, and Gender

Inequality: A Contemporary Approach to Race, Class, and Gender
by Lisa A. Keister (Author), Darby E. Southgate (Author)


This textbook reflects a hybrid approach to studying stratification. It addresses the knowledge accumulated by stratification scholars and challenges students to apply this information to their social world. Features include: • The text is divided into basic concepts (theoretical and methodological) and applications (e.g., to class, poverty, mobility, education, gender, race). • Each chapter includes a list of key concepts, questions for thought, suggested exercises, and multimedia resources (print, internet, and films). • A unique methodological chapter provides students the skills they will need to be able to read contemporary sociological literature. • The selection of chapters and chapter content provide students a sense of the topics, questions, and research that dominate...

Divided: The Perils of Our Growing Inequality

Divided: The Perils of Our Growing Inequality
by David Cay Johnston (Editor)


The issue of inequality has irrefutably returned to the fore, riding on the anger against Wall Street following the 2008 financial crisis and the concentration of economic and political power in the hands of the super–rich. The Occupy movement made the plight of the 99 percent an indelible part of the public consciousness, and concerns about inequality were a decisive factor in the 2012 presidential elections.

How bad is it? According to Pulitzer Prize–winning journalist David Cay Johnston, most Americans, in inflation–adjusted terms, are now back to the average income of 1966. Shockingly, from 2009 to 2011, the top 1 percent got 121 percent of the income gains while the bottom 99 percent saw their income fall. Yet in this most unequal of developed nations, every aspect of...

Inequality Reexamined

Inequality Reexamined
by Amartya Sen (Author)


In this deft analysis, Amartya Sen argues that the dictum "all men are created equal" serves largely to deflect attention from the fact that we differ in age, gender, talents, physical abilities as well as in material advantages and social background. He argues for concentrating on higher and more basic values: individual capabilities and freedom to achieve objectives.

The Haves and the Have-Nots: A Brief and Idiosyncratic History of Global Inequality

The Haves and the Have-Nots: A Brief and Idiosyncratic History of Global Inequality
by Branko Milanovic (Author)


Who is the richest person in the world, ever? Does where you were born affect how much money you’ll earn over a lifetime? How would we know? Why—beyond the idle curiosity—do these questions even matter? In The Haves and the Have-Nots, Branko Milanovic, one of the world’s leading experts on wealth, poverty, and the gap that separates them, explains these and other mysteries of how wealth is unevenly spread throughout our world, now and through time. Milanovic uses history, literature and stories straight out of today’s newspapers, to discuss one of the major divisions in our social lives: between the haves and the have-nots. He reveals just how rich Elizabeth Bennet’s suitor Mr. Darcy really was; how much Anna Karenina gained by falling in love; how wealthy ancient Romans...

The Creation of Inequality: How Our Prehistoric Ancestors Set the Stage for Monarchy, Slavery, and Empire

The Creation of Inequality: How Our Prehistoric Ancestors Set the Stage for Monarchy, Slavery, and Empire
by Kent Flannery (Author), Joyce Marcus (Author)


Our early ancestors lived in small groups and worked actively to preserve social equality. As they created larger societies, however, inequality rose, and by 2500 bce truly egalitarian societies were on the wane. In The Creation of Inequality, Kent Flannery and Joyce Marcus demonstrate that this development was not simply the result of population increase, food surplus, or the accumulation of valuables. Instead, inequality resulted from conscious manipulation of the unique social logic that lies at the core of every human group. A few societies allowed talented and ambitious individuals to rise in prestige while still preventing them from becoming a hereditary elite. But many others made high rank hereditary, by manipulating debts, genealogies, and sacred lore. At certain moments in...

Aftershock(Inequality for All--Movie Tie-in Edition)

Aftershock(Inequality for All--Movie Tie-in Edition)
by Robert B. Reich (Author)


Updated and With a New Introduction

When the nation’s economy foundered in 2008, blame was directed almost universally at Wall Street bankers. But Robert B. Reich, one of our most experienced and trusted voices on public policy, suggests another reason for the meltdown. Our real problem, he argues, lies in the increasing concentration of income at the top, robbing the vast middle class of the purchasing power it needs to keep the economy going. This thoughtful and detailed account of the American economy—and how we can fix it—is a practical, humane, and much-needed blueprint for rebuilding our society.

A Discourse Upon the Origin and the Foundation Of The Inequality Among Mankind

A Discourse Upon the Origin and the Foundation Of The Inequality Among Mankind


This book was converted from its physical edition to the digital format by a community of volunteers. You may find it for free on the web. Purchase of the Kindle edition includes wireless delivery.

The Great Escape: Health, Wealth, and the Origins of Inequality

The Great Escape: Health, Wealth, and the Origins of Inequality
by Angus Deaton (Author)


The world is a better place than it used to be. People are wealthier and healthier, and live longer lives. Yet the escapes from destitution by so many have left gaping inequalities between people and between nations. In The Great Escape, Angus Deaton--one of the foremost experts on economic development and on poverty--tells the remarkable story of how, starting 250 years ago, some parts of the world began to experience sustained progress, opening up gaps and setting the stage for today's hugely unequal world. Deaton takes an in-depth look at the historical and ongoing patterns behind the health and wealth of nations, and he addresses what needs to be done to help those left behind. Deaton describes vast innovations and wrenching setbacks: the successes of antibiotics, pest control,...

© 2014 BrightSurf.com