Research Seminar

Tolerance of inequality, reward of individual merit, and market integration: Experimental evidence from small-scale societies of Papua New Guinea — Gianluca Grimalda

18 Feb 2020

Institut für Weltwirtschaft


Gianluca Grimalda (Kiel Insitute)


An authoritative theory in anthropology is that markets exert a positive role in fostering pro-social behaviour and in reducing selfishness, because people learn to trust strangers and can exploit positive rewards through market interactions. An opposing view is that markets tend to spur individuals' selfish attitudes. 

We investigate whether greater integration with a market economy has a significant role in shaping tolerance of inequality, reward of merit, and social norms. We sample residents from eight small villages of horticulturalists in the island of Bougainville, Papua New Guinea. Villages have varying degrees of proximity with the market town in the island. Triads of participants – two “stakeholders” and a “spectator” - were involved in anonymous experiments of earnings redistribution. The stakeholder who either turned out to be luckier in an unbiased random procedure (Luck treatment) or more able in a game of ability (Merit treatment) was assigned a higher sum of money as initial earnings than the other. Stakeholders and spectator were asked to propose a division of the total sum of money among the stakeholders. 

We find that: (1) The closer a village to the market town, the higher the selfishness of participants in demanding more money for themselves, and the higher the propensity of spectators to assign more money to the luckier / more able stakeholder; (2) Behaviour across villages is nonetheless variable. Egalitarianism is widespread in most isolated villages. Participants from villages at intermediate levels of proximity with the market town, instead, appear to tolerate inequality in that many less lucky / less able stakeholders assign more money to the luckier / more able participant; (3) No propensity for meritocracy – i.e. rewarding more the more able than the luckier stakeholder – can be found; (4) The presence of the village leader as an observer has a moderate effect in inducing luckier / more able stakeholders to demand less money for themselves. These results suggest some speculative conclusions. Greater integration with markets appears to be associated with greater selfishness. Meritocracy is not a “psychological universal” but rather a propensity that may be typical of economically more developed societies.


Gianluca Grimalda (Kiel Institute), Andreas Pondorfer (Bonn University), Matthias Sutter (MPI for Research on Collective Goods, Bonn)


Lecture Hall (A-032)