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A Trackable Model of Reciprocity and Fairness

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  • Cox, J.
  • Friedman, D.
  • Gjerstad, S.

Abstract

We introduced a parametric model of other-regarding preferences in which my emotional state determines the marginal rate of substitution between my own and other' payoffs, and thus my subsequent choices. In turn, my emotional state responds to relative status and to the kindness or unkindness of others' choices. Structural estimations of this model with six existing data sets demonstrate that other-regarding preferences depend on status, reciprocity, and perceived property rights.

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Bibliographic Info

Paper provided by Purdue University, Department of Economics in its series Purdue University Economics Working Papers with number 1181.

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Length: 41 pages
Date of creation: Apr 2006
Date of revision:
Handle: RePEc:pur:prukra:1181

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Keywords: RECIPROCITY ; MARGINAL RATE OF SUBSTITUTION ; PAYOFFS;

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References

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