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


New findings show stark inequalities in aging as government encourages us to work longer
Changes in pension and employment policies are making it increasingly necessary for older people in the UK to work beyond the age of 65.

Does a competent leader make a good friend?
Imagine you've travelled back in time to the 18th century, and you're on board a ship far out in the open sea. Pirates lurk close by, ready to attack.

Poor access to primary care results in poorer health for deaf people
Deaf people who sign have poorer health than the general population, according to a study led by researchers from the School for Social and Community Medicine at the University of Bristol, UK.

Socioeconomic differences in adolescent health getting wider
Health inequalities in young people have grown alongside socioeconomic disparities between the rich and poor.

Is this the year you join the 1 percent?
Here's some good news for the New Year: According to new research by Washington University in St. Louis and Cornell University, there's a 1 in 9 chance that a typical American will hit the jackpot and join the wealthiest 1 percent for at least one year in her or his working life.

No direct link found between rising inequality and reduced trust
Does rising economic inequality causes trust to fall in society and thus endanger social cohesion? Recent academic research appears to support this notion. However, a study from the University of Luxembourg disagrees.

Towards a scientific process freed from systemic bias
Research on how science works - the science of science - can benefit from studying the digital traces generated during the research process, such as peer-reviewed publications.

What does davos really do? Analyzing the World Economic Forum
Every January, hundreds of politicians, CEOs, scientific experts, and celebrities gather for their annual meeting in the exclusive Swiss ski resort of Davos to "improve the state of the world." Yet, the World Economic Forum's influence on society and consumption is surprisingly little understood.

Majority of young women and men prefer egalitarian relationships, study shows
The majority of young women and men today would prefer an egalitarian relationship in which work and family responsibilities are shared equally between partners if that possibility were available to them, according to a new study from the University of Texas at Austin and the University of California-Santa Barbara.

New planetary dashboard shows 'Great Acceleration' in human activity since 1950
Human activity, predominantly the global economic system, is now the prime driver of change in the Earth System (the sum of our planet's interacting physical, chemical, biological and human processes), according to a set of 24 global indicators, or "planetary dashboard".
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 the...

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: 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...

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...

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...

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.

Inequality: What Can Be Done?

Inequality: What Can Be Done?
by Anthony B. Atkinson (Author)


Inequality is one of our most urgent social problems. Curbed in the decades after World War II, it has recently returned with a vengeance. We all know the scale of the problem—talk about the 99% and the 1% is entrenched in public debate—but there has been little discussion of what we can do but despair. According to the distinguished economist Anthony Atkinson, however, we can do much more than skeptics imagine. Atkinson has long been at the forefront of research on inequality, and brings his theoretical and practical experience to bear on its diverse problems. He presents a comprehensive set of policies that could bring about a genuine shift in the distribution of income in developed countries. The problem, Atkinson shows, is not simply that the rich are getting richer. We are also...

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

© 2015 BrightSurf.com