Why Inequality Makes Cooperation Harder
What happens to trust and cooperation when one side has more to gain than the other? This question is at the center of a new experiment by Alessandro Stringhi, a researcher at the Faculty of Business Administration of the Prague University of Economics and Business, published in Games and Economic Behavior.
Throughout the history of social science, countless thinkers and researchers have examined the mechanisms of trust, fairness, and honesty in human relationships. It is no coincidence that trust is often described as one of the fundamental prerequisites for a well-functioning society.
One prominent explanation for honest and prosocial behavior is the desire to avoid guilt — an uncomfortable emotion people experience when they betray someone’s trust. Another influential line of thought argues that antisocial behavior is hindered by an intrinsic aversion to inequality.
“Both guilt aversion and inequity aversion can explain prosocial behavior in trust settings, so it is often difficult to distinguish between them empirically. The aim of the experiment was to create a setting in which the two theories make opposite predictions,” explains Alessandro Stringhi, who works at the Faculty of Business Administration within the Decision Lab research group, focusing on behavioral psychology and economics.
A simple trust game with a crucial twist
The laboratory experiment involved 128 participants and was based on a classic Trust Game, with monetary stakes of a few euros. Participants were assigned to one of two roles: either the “trustor” or the “trustee.” The trustor had to decide whether to choose a safe option and walk away with a smaller amount or to trust the trustee and hope for a better outcome. Then it was up to the trustee if he or she chose a prosocial option, i.e. same amount for both sides, or a selfish one that wasn’t beneficial for the trustor at all.
Both players knew that trust followed by a fair response would make cooperation possible and improve the outcome for both sides. However, the trustor still had to consider the risk that the trustee would act selfishly instead.
The crucial change in the experiment was simple: in one version of the game, the trustor had more at stake, while the trustee’s payoffs remained unchanged. This meant that betraying trust would now hurt the trustor more, but also that prosocial decisions couldn’t lead to a fair outcome.
“This design allowed me to put the two theories into direct opposition,” says Stringhi. “If guilt aversion is more relevant in this setting, trustees should become more willing to act prosocially, because disappointing the other player now represents greater losses. On the other hand, If inequity aversion is more relevant, trustees should become less willing to be kind to trustees, because payoffs aren’t equally set on their behalf,” he explains.
When inequality increased, trust and prosocial behavior fell sharply
When payoffs shifted in favor of trustors, trustees became much less likely to choose the prosocial option. The share of prosocial decisions fell from about 44% in the baseline version of the game to about 20% in the version with greater inequality.
Trustors simultaneously became less willing to trust in the first place — their willingness to risk that cooperation would be reciprocated fell by roughly half. Expectations shifted in the same direction: anticipating fairness and trust from others became significantly less common.
The findings suggest that in environments with pronounced disparities, inequality acts as a powerful brake on trust and cooperation. “When inequality increases, people primarily react to the outcome no longer being perceived as fair,” argues Stringhi. “Inequality undermines trust and cooperation in a way that outweighs even the potential feeling of guilt associated with betraying trust,” he concludes.