Abstract: China is in a critical period of realizing a well-off society in an all-round way, and the adjustment of the current distribution system is a problem that must be solved to achieve common prosperity. This paper constructs a theoretical model including cooperative production and distribution process, and discusses the heterogeneous resource allocation decision of participants under different distributive ethics and rational conditions, in order to seek to method narrowing social income gap in the framework of institutional analysis. The results show that the production distribution propensity coefficient (formal institutional parameters) can narrow the social income gap to a certain extent, but the scope of institutional parameters is smaller; after economic individual′s altruistic preference (informal institution) parameters has played a role in the distribution process, it can adjust the income gap in line with a larger range of formal institutional parameters, keeping it to a lower level. Therefore, to mobilize the initiative of the informal system in the distribution process is conducive to the realization of “people with rich first bring others to be rich”and finally achieving common prosperity.

Key words: informal system, distributive ethics, rational condition, distributive propensity coefficient