Economic inequality, social capital and the role of merit and luck: An experimental study
Abstract
Research consistently links inequality to lower social capital, the networks, norms, and trust that facilitate cooperation. Yet not all inequality is perceived the same: people are generally more accepting of inequality arising from merit than from luck. This study investigates whether the negative effect of unequal environments on social capital depends on the source of inequality – merit or luck. Using trust, prisoner’s dilemma, and stag-hunt games, we find that inequality, regardless of its source, reduces trustworthiness and undermines coordination to the payoff-dominant outcome in the stag-hunt game. Notably, luck-based inequality results in higher trust compared to merit-based inequality, even though participants perceive meritocratic allocations as fairer.
Fields of Study & Subjects
Islamic Finance and Banking Studies
Publication details
- Journal / source
- Journal of Economic Behavior & Organization
- Publisher
- Elsevier BV
- Volume
- 246
- Pages
- 107588–107588
- Publication date
- 7 May 2026
- Language
- EN