Excluding the Wealthy From Compulsory Solidarity: A Lab Experiment

Compulsory solidarity is imposed in most large modern market economies in various forms, however there still remain instances when the wealthy are (implicitly or explicitly) excluded from such solidarity. In this paper we aim to represent and analyze experimentally the comparison of compulsory solidarity when it is applied generally and when it excludes the wealthy society members. Compulsory solidarity is captured by linear public goods provision with three poorly, two slightly better, and a single very richly endowed society member. All six society members can contribute and gain from the public good in the general condition whereas only the five non-wealthy members can do so in the partial condition. In both conditions after contributing, the single wealthy individual can retrieve costly information on individual contributions and subsequently engage in charitable donations. According to our data including the wealthy does not crowd out charitable giving