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How exposure to markets can favor inequity-averse preferences

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  • Zubrickas, Robertas

Abstract

This paper shows how market exposure can support the evolution of non-individualistic preferences. In a group, one agent is randomly selected to divide an exogenous endowment. Endowment shares are used for either consumption or market exchange with external merchants. As a more equal endowment distribution attenuates the scope of merchants’ price discrimination, we argue that inequity-averse preferences may lead to a higher utility of consumption and so survive evolutionary pressures. This effect arises from an opportunity to create and extract information rents. We offer a new explanation to the empirical finding that a society's exposure to markets has a positive effect on its members’ sociality.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 84 (2012)
Issue (Month): 1 ()
Pages: 174-181

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Handle: RePEc:eee:jeborg:v:84:y:2012:i:1:p:174-181

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Web page: http://www.elsevier.com/locate/jebo

Related research

Keywords: Evolution of preferences; Market integration; Inequity aversion; Screening; Cross-societal differences;

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