DP14811 Lords and Vassals: Power, Patronage, and the Emergence of Inequality

Author(s): Robert Akerlof, Hongyi Li, Jonathan Yeo
Publication Date: May 2020
Keyword(s): gender differences, inequality, institutions, patronage, Power
JEL(s): D02, D31, D72, J16, O10
Programme Areas: Development Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=14811

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.