Abstract

In this paper, we revisit a seminal contribution of Shaun Hargreaves-Heap to the development of Behavioral Political Economy. In 2002, together with his coauthor Yanis Varoufakis, he studied how arbitrary conventions associated with a randomly assigned identity shape the behavior of participants in experimental coordination games. The divide between advantaged and disadvantaged players has different consequences for the actions and payoffs of both types of player. Advantaged players adhere to the arbitrary convention when matched with other advantaged individuals (at a large personal cost). Disadvantaged subjects deviate from the convention when matched with other disadvantaged individuals (at a significant and mutual gain). We connect this inspiring contribution with our own work, exploring the long shadow of exposure to advantages and disadvantages in a different laboratory study, and the cooperative behavior of disadvantaged individuals in the field.