Sebastian Senn Nico Mutzner ^* Vincent Oberhauser Rauhut Heiko

• University of Zurich, Zürich, Switzerland

Contemporary challenges such as pandemics and climate change are fundamentally cooperation problems, where individual short-term interests often conflict with the collective good. This tension is believed to be exacerbated by rising economic inequality and increasing individualism, both of which are thought to erode social cohesion and cooperation, leading to adverse social outcomes. To better understand these dynamics, public goods games (PGGs) are frequently employed as a tool to study cooperation in situations involving unequal resource distribution. However, empirical findings on the effects of inequality in PGGs have been inconsistent. This study addresses these mixed results by highlighting the inconsistent application of heterogeneity in previous research. A new research design is introduced that compares collectivistic and individualistic groups to examine the combined effects of individualism and inequality on cooperation. The findings reveal no significant differences in cooperation rates between collectivistic and individualistic groups. However, groups with higher inequality displayed significantly higher cooperation rates compared to those in equal resource conditions. Notably, heterogeneous groups showed considerable variation in their success at establishing cooperation. Further analysis indicates that the willingness to reduce initial inequality serves as a strong signal, enhancing group identity and fostering cooperation. In groups with high levels of group identity, inequality appears to function as a coordination mechanism, potentially increasing cooperation. These findings suggest that in contexts where inherent collectivism is strong, inequality can be strategically leveraged as a coordination tool, distributing the burden of collective costs more effectively and enhancing overall cooperation.