Need-based transfer systems are more vulnerable to cheating when resources are hidden

More Satisfaction, Less Equality: Distributive Effects of Transparent Needs in a Laboratory Experiment

Societies are confronted with the dilemma that need satisfaction requires transparent individual needs. We study the effect of information about others' needs on the distribution of a joint endowment in a three-player network exchange game in a laboratory experiment. Need levels are exogenously given and either transparent (known to all three network members) or opaque (only known to the players themselves). The three players negotiate in dyads until two players agree on a distribution. We expect that the transparency of need thresholds raises need satisfaction but lowers equality. The results suggest that the members of the dyad who agree on the distribution can satisfy their own need thresholds even when information about thresholds is opaque. The effect of transparency on the remaining network member is antithetical: while transparency increases the rate of need satisfaction, it decreases the average share of allocations when needs are low. In the opaque condition, allocated shares are larger, but need satisfaction is lower. This reveals the ambivalent distributive effects of transparent need thresholds: Transparency helps those with the highest need thresholds, but it can hurt those with lower need thresholds, and it barely affects the ones with the most influence on the decision.

Supplementary Information

The online version contains supplementary material available at 10.1007/s11211-024-00434-0.

C-H-E-A-T: Wordle Cheating Is Related to Religiosity and Cultural Tightness

Wordle is a daily, online brainteaser. The widespread popularity of the game in the early months of 2022 has also led to widespread cheating. Here, we use data from Google Trends and Twitter to explore correlates of cheating on Wordle. We find that cheating behavior is negatively related to religiosity and cultural tightness. Although this is a benign example of cheating behavior, we discuss how popular trends can be used as case studies of group-level behavior.

Design principles for risk-pooling systems

In times of crisis, risk pooling can enhance the resilience of individuals, households and communities. Risk-pooling systems are most effective when their participants adhere to several principles: (1) participants should agree that the pool is for needs that arise unpredictably, not for routine, predictable needs; (2) giving to those in need should not create an obligation for them to repay; (3) participants should not be expected to help others until they have taken care of their own needs; (4) participants should have a consensus about what constitutes need; (5) resources should be either naturally visible or made visible to reduce cheating; (6) individuals should be able to decide which partners to accept; and (7) the scale of the network should be large enough to cover the scale of risks. We discuss the cultural and evolutionary foundations of risk-pooling systems, their vulnerabilities and their relationship to commercial insurance.