Inequity Aversion May Increase Inequity
AbstractInequity aversion models have been used to explain equitable payoff divisions in bargaining games. I show that inequity aversion can actually "increase" the asymmetry of payoff division if unanimity is not required. This is because responders may be willing to accept a lower share rather than risk being left out. Inequity aversion may also affect comparative statics: the advantage of being the proposer can "decrease" as players become more impatient. Copyright 2007 The Author(s). Journal compilation Royal Economic Society 2007.
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Bibliographic InfoArticle provided by Royal Economic Society in its journal The Economic Journal.
Volume (Year): 117 (2007)
Issue (Month): 519 (03)
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- A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
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