Abstract
We often cooperate in unequal and uncertain environments. Most societies have unequal distribution of resources and face constant risk for disasters or unexpected events that lead to loss of resources. For example, we see an increase in wealth inequality within both affluent and developing countries, which similarly experience increased disasters. What is not clear is if cooperation can persist with resource disparities and risk for repeated disasters. This study experimentally explores this query by introducing stochastic shocks and heterogeneous endowments to a threshold public goods game. Participants receive endowments and decide how much to keep for themselves and give to the group, but losses can randomly happen if group contributions are below a threshold level. The findings reveal that compared to a control setting, cooperation remains the same with inequality; higher with uncertainty; and the effect of uncertainty is stronger than inequality. In most cases, the poor relatively gives more than the rich, but it can happen that a fair share of cost distribution can arise. The experiments were conducted in South Africa and Sweden, countries with contrasting social class and income structures.