Lords and Vassals: Power, Patronage, and the Emergence of Inequality

57 Pages Posted: 28 May 2020

See all articles by Robert Akerlof

Robert Akerlof

University of Warwick - Department of Economics

Hongyi Li

UNSW Australia Business School, School of Economics

Jonathan Yeo

Nanyang Technological University

Date Written: May 2020

Abstract

This paper uses a laboratory experiment to study competitions for power-and the role of patronage in such competitions. We construct and analyze a new game-the "chicken-and-egg game"-in which chickens correspond to positions of power and eggs are the game's currency. We find that power tends to accumulate, through a "power begets power" dynamic, in the hands of "lords." Other subjects behave like their vassals in the sense that they take lords' handouts rather than compete against them. We observe substantial wealth inequality as well as power inequality. There are also striking gender differences in outcomes-particularly in rates of lordship. In a second treatment, where we eliminate patronage by knocking out the ability to transfer eggs, inequality is vastly reduced and the "power begets power" dynamic disappears.

Keywords: gender differences, inequality, institutions, patronage, Power

JEL Classification: D02, D31, D72, J16, O10

Suggested Citation

Akerlof, Robert and Li, Hongyi and Yeo, Jonathan, Lords and Vassals: Power, Patronage, and the Emergence of Inequality (May 2020). CEPR Discussion Paper No. DP14811, Available at SSRN: https://ssrn.com/abstract=3612882

Robert Akerlof (Contact Author)

University of Warwick - Department of Economics ( email )

Coventry CV4 7AL
United Kingdom

Hongyi Li

UNSW Australia Business School, School of Economics ( email )

High Street
Sydney, NSW 2052
Australia

Jonathan Yeo

Nanyang Technological University ( email )

HSS 04-53, 14 Nanyang Drive
Singapore
Singapore
637332 (Fax)

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