Inequality, communication and the avoidance of disastrous climate change in a public goods game

Abstract

International efforts to provide global public goods often face the challenges of coordinating national contributions and distributing costs equitably in the face of uncertainty, inequality, and freeriding incentives. In an experimental setting, we distribute endowments unequally among a group of people who can reach a fixed target sum through successive money contributions, knowing that if they fail, they will lose all their remaining money with 50% probability. In some treatments, we give players the option to communicate intended contributions. We find that inequality reduces the prospects of reaching the target but that communication increases success dramatically. Successful groups tend to eliminate inequality over the course of the game, with rich players signalling willingness to redistribute early on. Our results suggest that coordination-promoting institutions and early redistribution from richer to poorer nations are both decisive for the avoidance of global calamities, such as disruptive climate change.

Reference

Tavoni, A., et al. July 2011. Inequality, communication and the avoidance of disastrous climate change in a public goods game. Proceedings of the National Academy of Sciences U.S.A., v.108, pp.11825–11829.

(Also see commentary, in response to paper, from Scott Barrett: ‘Avoiding disastrous climate change is possible but not inevitable‘.)