The emergence of inequality in social groups: Network structure and institutions affect the distribution of earnings in cooperation games

RESEARCH ARTICLE The emergence of inequality in social groups: Network structure and institutions affect the distribution of earnings in cooperation games Milena Tsvetkova1*, Claudia Wagner2, Andrew Mao3¤ 1 Department of Methodology, London School of Economics and Political Science, London, United Kingdom, 2 GESIS – Leibniz Institute for Social Sciences, Cologne, Germany, 3 Department of Management, Aarhus University, Aarhus, Denmark a1111111111 a1111111111 a1111111111 a1111111111 a1111111111 OPEN ACCESS Citation: Tsvetkova M, Wagner C, Mao A (2018) The emergence of inequality in social groups: Network structure and institutions affect the distribution of earnings in cooperation games. PLoS ONE 13(7): e0200965. https://doi.org/ 10.1371/journal.pone.0200965 Editor: Floriana Gargiulo, Centre National de la Recherche Scientifique, FRANCE Received: April 6, 2018 Accepted: July 4, 2018 Published: July 20, 2018 Copyright: © 2018 Tsvetkova et al. This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. ¤ Current address: CTRL-labs, New York, NY, United States of America * Abstract From small communities to entire nations and society at large, inequality in wealth, social status, and power is one of the most pervasive and tenacious features of the social world. What causes inequality to emerge and persist? In this study, we investigate how the structure and rules of our interactions can increase inequality in social groups. Specifically, we look into the effects of four structural conditions—network structure, network fluidity, reputation tracking, and punishment institutions—on the distribution of earnings in network cooperation games. We analyze 33 experiments comprising 96 experimental conditions altogether. We find that there is more inequality in clustered networks compared to random networks, in fixed networks compared to randomly rewired and strategically updated networks, and in groups with punishment institutions compared to groups without. Secondary analyses suggest that the reasons inequality emerges under these conditions may have to do with the fact that fixed networks allow exploitation of the poor by the wealthy and clustered networks foster segregation between the poor and the wealthy, while the burden of costly punishment falls onto the poor, leaving them poorer. Surprisingly, we do not find evidence that inequality is affected by reputation in a systematic way but this could be because reputation needs to play out in a particular network environment in order to have an effect. Overall, our findings suggest possible strategies and interventions to decrease inequality and mitigate its negative impact, particularly in the context of mid- and large-sized organizations and online communities. Data Availability Statement: All data files are available from the GESIS Data Archive for the Social Sciences (DOI http://dx.doi.org/10.7802/ 1697). Funding: This research was made possible through the generous support of the Volkswagen Foundation (https://www.volkswagenstiftung.de/) under Grant Ref. 92 173. The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript. Introduction From social status hierarchies in kindergarten play groups and college fraternities [1] to pay dispersion at the workplace [2] and from extreme levels of popularity in online communities [3] to shockingly uneven distributions of material wealth within states [4], inequality takes many forms and occurs at many different levels of social organization. Why do we observe PLOS ONE | https://doi.org/10.1371/journal.pone.0200965 July 20, 2018 1 / 16 The emergence of inequality in social groups Competing interests: The authors have declared that no competing interests exist. extreme distributions of outcomes when people only moderately vary in intelligence, physical abilities, and psychological traits? Why does inequality exist when people actually have strong preference for equity and fairness [5, 6]? Evidently, we cannot explain inequality with human heterogeneity or preferences. Instead, social scientists have looked at social structure and its effect on behavior to explain the outcomes of individuals and groups. For example, researchers focusing on historical approaches have argued that certain global, state-level, and group-level processes and trends have disadvantaged some classes of individuals in terms of economic capital and political representation while enriching others [7–9]. Sociologists working on social stratification and mobility have observed that structural, network, and psychological factors, such as institutional arrangements, neighborhood and school characteristics, parents’ socioeconomic standing, peer influences, and innate ability and motivation, translate into individual outcomes such as social class, education, health, and income [10–12]. Social psychologists and behavioral economists have used controlled experiments to demonstrate that social differentiation and scarcity of resources affects individual behavior in a way that reinforces and enhances pre-existing differences [13–16]. While this research has greatly expanded our understanding of the extent, trends, and consequences of inequality in society, it does not paint a complete picture. Historical approaches focus on the macro-level and often ignore individuals, stratification research focuses on individuals but disregards interpersonal interactions, while behavioral research centers on smallgroup interactions but rarely compares groups on a macro-level. In many social settings, large groups of individuals interact in a way that their behavior and interactions drive group-level outcomes such as inequality, while the emerging group-level patterns in turn affect individual decision-making and actions. In such complex systems, the coevolution of interaction structure and individual behavior might create self-reinforcing feedback loops that amplify or exaggerate small initial and/or accidental differences into extreme distributions of outcomes [17]. Inequality, then, can be viewed as an emergent phenomenon that can play out differently under different structural and institutional constraints. This will be the case in mid- and largesized social groups based on face-to-face or online interactions such as hunter-gatherer groups, agrarian villages, large work offices, schools, social media sites, online forums, and user-generated content communities. Some research on how inequality emerges in complex social systems already exists. Theoretical work from within this paradigm has shown, for example, that population growth and preferential attachment [18], multiplicative gains and losses [19], and trade and inheritance [20] create and maintain inequality. Empirical research on this t (...truncated)