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Equity Aversion: Social Norms and the Desire to Be Ahead

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Author Info

  • Chaim Fershtman
  • Uri Gneezy
  • John A. List

Abstract

Inequity aversion models have dominated the behavioral economics landscape in the last decade. This study uses variants of dictator and trust games to provide empirical content to these models. We manipulate market features—such as competition over resources—to demonstrate that extant models cannot explain realistic manipulations of either game. For example, we show that if socially acceptable actions provide one player with a greater portion of the rents, she will put forth extra effort to secure them, to the detriment of the other person. When she can earn more than the other player through customary actions, we find a preference for selfishness. (JEL C71, C70, D03, Z13)

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Bibliographic Info

Article provided by American Economic Association in its journal American Economic Journal: Microeconomics.

Volume (Year): 4 (2012)
Issue (Month): 4 (November)
Pages: 131-44

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Handle: RePEc:aea:aejmic:v:4:y:2012:i:4:p:131-44

Note: DOI: 10.1257/mic.4.4.131
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References

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  1. Nicholas Bardsley, 2008. "Dictator game giving: altruism or artefact?," Experimental Economics, Springer, vol. 11(2), pages 122-133, June.
  2. Charness, Gary B & Rabin, Matthew, 2001. "Understanding Social Preferences With Simple Tests," University of California at Santa Barbara, Economics Working Paper Series qt0dc3k4m5, Department of Economics, UC Santa Barbara.
  3. M. Rabin, 2001. "Incorporating Fairness into Game Theory and Economics," Levine's Working Paper Archive 511, David K. Levine.
  4. Guth, Werner & Schmittberger, Rolf & Schwarze, Bernd, 1982. "An experimental analysis of ultimatum bargaining," Journal of Economic Behavior & Organization, Elsevier, vol. 3(4), pages 367-388, December.
  5. George A. Akerlof, 1978. "A theory of social custom, of which unemployment may be one consequence," Special Studies Papers 118, Board of Governors of the Federal Reserve System (U.S.).
  6. G. Bolton, 2010. "A comparative model of bargaining: theory and evidence," Levine's Working Paper Archive 263, David K. Levine.
  7. James Konow, 2003. "Which Is the Fairest One of All? A Positive Analysis of Justice Theories," Journal of Economic Literature, American Economic Association, vol. 41(4), pages 1188-1239, December.
  8. Steven D. Levitt & John A. List, 2007. "What Do Laboratory Experiments Measuring Social Preferences Reveal About the Real World?," Journal of Economic Perspectives, American Economic Association, vol. 21(2), pages 153-174, Spring.
  9. Akerlof, George A, 1976. "The Economics of Caste and of the Rat Race and Other Woeful Tales," The Quarterly Journal of Economics, MIT Press, vol. 90(4), pages 599-617, November.
  10. Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March.
  11. John A. List, 2007. "On the Interpretation of Giving in Dictator Games," Journal of Political Economy, University of Chicago Press, vol. 115, pages 482-493.
  12. Elster, Jon, 1989. "Social Norms and Economic Theory," Journal of Economic Perspectives, American Economic Association, vol. 3(4), pages 99-117, Fall.
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Cited by:
  1. Halevy, Yoram & Peters, Michael, 2007. "Other Regarding Preferences: Outcomes, Intentions, or Interdependence," Microeconomics.ca working papers peters-07-03-31-11-46-48, Vancouver School of Economics, revised 24 Jun 2009.
  2. Kirchgässner, Gebhard, 2014. "On Self-Interest and Greed," Economics Working Paper Series 1416, University of St. Gallen, School of Economics and Political Science.
  3. Amrei M. Lahno & Marta Serra-Garcia, 2012. "Peer Effects in Risk Taking," CESifo Working Paper Series 4057, CESifo Group Munich.
  4. Frederik Schwerter, 2013. "Social Reference Points and Risk Taking," Bonn Econ Discussion Papers bgse11_2013, University of Bonn, Germany, revised Jan 2014.
  5. Balafoutas, Loukas & Kerschbamer, Rudolf & Kocher, Martin G. & Sutter, Matthias, 2013. "Revealed Distributional Preferences: Individuals vs. Teams," Discussion Papers in Economics 15728, University of Munich, Department of Economics.
  6. Rudolf Kerschbamer, 2013. "The Geometry of Distributional Preferences and a Non-Parametric Identification Approach," Working Papers 2013-25, Faculty of Economics and Statistics, University of Innsbruck.
  7. Gebhard Kirchgässner, 2014. "On Self-Interest and Greed," CESifo Working Paper Series 4883, CESifo Group Munich.

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