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Stochastic Expected Inequity-Averse Choice

Author

Listed:
  • Yosuke Hashidate

    (Waseda University)

  • Keisuke Yoshihara

    (Gunma University)

Abstract

This note studies stochastic inequity-averse choice behavior, capturing ex-post fairness and ex-ante fairness. By studying deliberate randomization, we characterize the stochastic choice behavior stemming from Saito [Social Preferences under Risk: Equality of Opportunity versus Equality of Outcome, American Economic Review, 103 (7): 3084-3101]. We find that the violations of first order stochastic dominance (FOSD) and Regularity occur, and that ex-ante fairness can lead to preference reversal phenomena.

Suggested Citation

  • Yosuke Hashidate & Keisuke Yoshihara, 2021. "Stochastic Expected Inequity-Averse Choice," Economics Bulletin, AccessEcon, vol. 41(3), pages 1843-1848.
    • Handle: RePEc:ebl:ecbull:eb-21-00270
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2021/Volume41/EB-21-V41-I3-P156.pdf
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    References listed on IDEAS

    as
    1. Yosuke Hashidate & Keisuke Yoshihara, 2021. "Stochastic Choice and Social Preferences: Inequity Aversion versus Shame Aversion," Working Papers e155, Tokyo Center for Economic Research.
    2. Kota Saito, 2013. "Social Preferences under Risk: Equality of Opportunity versus Equality of Outcome," American Economic Review, American Economic Association, vol. 103(7), pages 3084-3101, December.
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    Cited by:

    1. Yosuke Hashidate & Keisuke Yoshihara, 2021. "Stochastic Choice and Social Preferences: Inequity Aversion versus Shame Aversion," Working Papers e155, Tokyo Center for Economic Research.

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    More about this item

    Keywords

    Inequity Aversion; Ex-Ante Fairness; Ex-Post Fairness; Deliberate Randomization.;
    All these keywords.

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

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