Solving normative conflicts in collective action by promoting redistribution

Heterogeneous returns from public good contributions within groups create a normative conflict between efficiency and equality. Maximizing efficiency requires equally high contributions from everyone but increases inequality in earnings, whereas unequal contributions can equalize earnings at the cost of efficiency. Solving this tension requires not only overcoming free riding but also reaching a consensus on what constitutes a fair norm of contribution.
We propose a decentralized, voluntary redistribution mechanism that allows high-benefit members to reward full contributions from low-benefit members. This mechanism is designed to reconcile efficient contributions with earnings equality ex post. We test whether such a mechanism can resolve normative conflict and sustain efficient cooperation in a laboratory experiment.
We elicited which fairness principle participants found most appropriate as impartial spectators among the four following principles: zero contributions, efficient contributions, equalizing-earnings contributions, and proportional contributions, both before and after introducing the redistribution mechanism. In the absence of the redistribution mechanism, there was equal support for the efficiency, equality, and proportionality fairness views. After the introduction of the redistribution mechanism, the majority of subjects (60%) considered the efficient contributions principle to be the most appropriate and expected others to agree.
Despite this normative consensus, participants did not act accordingly: only 5% of groups implemented the efficient contributions principle with redistribution in the absence of a coordination device. Designating a leader who endorses this principle and can make non-binding recommendations enabled a majority of groups (67%) to adopt it successfully. This resulted in full contributions and earnings equalization through redistribution from advantaged to disadvantaged members, effectively resolving the conflict.
Our findings show that normative agreement on a fairness principle is insufficient for the implementation of that principle in a decentralized setting. However, appointing a leader who can act as a coordination device can translate shared fairness ideals into efficient and equitable collective outcomes, suggesting that institutional or organizational leadership may play a crucial role in managing inequality and fostering cooperation in societal contexts.