Imagine that you live in a village which is threatened with rising sea levels. If you don’t do anything, your home is going to be flooded. You could pool your resources together with other villagers and build a large dam around the entire village to ensure that everyone’s property is safe. Or, if you have enough resources yourself, you could build a smaller dam around your own house, protecting your property — and leaving everyone else to either do the same or try and co-operate without you.
Human societies constantly face similar choices between public and private solutions to pressing issues: think about the provision of healthcare or education, for instance. But only some people can afford to build a dam around their own house, or send their child to a private school. Now a new study in Nature Communications suggests that when group members are able to be self-reliant in this way, the provision of public goods suffers.
Jörg Gross and colleagues at Leiden University recruited 200 participants, who were divided into 50 groups of four to play an economic game. Across a series of rounds, each participant chose how many of their personal “resource points” to invest in both a public and private fund. If the four participants collectively put enough points into the public fund to reach a certain threshold, then they would each be able to keep any of their remaining uninvested points, which could later be converted into real cash (this is like the villagers coming together to invest enough to successfully create a large dam, write the authors).
If the group failed to invest enough to meet the public threshold, then they wouldn’t be protected as a group. But if an individual had put enough points into their private fund, they would still be able to keep their uninvested points (in other words, they had invested enough to complete their own private “dam”). If neither threshold was met, then that person would lose all their uninvested points for the round.
The researchers tweaked a few rules between groups and across the course of the game. In half of the groups, participants each had 90 points at their disposal every round. But in the other half, points were distributed unequally: two participants were given 120 points and two were given just 60. And while the threshold for the public solution was always set at 180 points, the cost of the private one varied between 45 to 75 points, and in some rounds was not even an option.
The team found that when a private solution wasn’t available, the participants worked together, and on nearly 80% of trials successfully invested the 180 points needed for the public solution. This was true whether resources were distributed equally or unequally within the group.
Things changed when there was the possibility of creating a private solution. The cheaper the private solution, the more likely participants were to invest in it, and the less likely groups were to successfully invest in the public alternative. In groups in which resources were distributed unequally, this left the two poorer participants in a tricky place. Remember, these participants had just 60 points each, so were either forced to rely on contributions from the wealthier participants to meet the 180 point threshold for the public solution, or had to spend almost all of their points on the private option (in the rounds where they could afford it). The two wealthier participants, on the other hand, could be much more self-reliant.
Sometimes the wealthier participants did indeed co-operate with their poorer counterparts to create a public solution. But often they made no contributions to public funds at all, particularly when the private solution was cheap. And overall they dedicated a smaller proportion of their resources to the public fund than did the poorer participants.
This all had the knock-on effect of increasing the “wealth gap” between participants. As private options got cheaper, the wealthier, self-reliant participants were able to save more uninvested points to convert into cash. But at the same time, the poorer participants ended up saving fewer uninvested points, presumably because they could no longer depend on there being a public option, and so were forced to spend most of their points on the private solution.
The study shows that groups can co-operate well when they need to, write the authors. But as people amass wealth and are able to be more self-reliant, they become less dependent on the group, which undermines that cooperation. “With increased self-reliance, groups increasingly fail to efficiently create public goods which amplifies wealth inequalities [and] undermines social cohesion,” the team writes.
Of course, a lab-based economic game doesn’t reflect all the nuances of how public and private services work in the real world. Fortunately, people have no choice but to contribute to many public services — healthcare, schools, and so on — through their taxes, even if they opt to use private alternatives themselves. Still, the study lays bare a friction that clearly exists in society— even if the results are not entirely surprising.
– Self-reliance crowds out group cooperation and increases wealth inequality
Matthew Warren (@MattBWarren) is Editor of BPS Research Digest
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