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On Inequity Aversion A Reply to Binmore and Shaked

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Author Info
Ernst Fehr
Klaus M. Schmidt () (Institute for Empirical Research in Economics, University of Zurich, Bluemlisalpstrasse 10, CH-8006 Zurich, Switzerland, Department of Economics, University of Munich, Ludwigstrasse 28, D-80539 Munich, Germany)

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Abstract

In this paper we reply to Binmore and Shaked’s criticism of the Fehr-Schmidt model of inequity aversion. We put the theory and their arguments into perspective and show that their criticism is not substantiated. Finally, we briefly comment on the main challenges for future research on social preferences.

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Publisher Info
Paper provided by SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich in its series Discussion Papers with number 256.

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Date of creation: Feb 2009
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Handle: RePEc:trf:wpaper:256

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Related research
Keywords: Experiments; other-regarding preferences; inequity aversion;

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Find related papers by JEL classification:
B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General

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    Other versions:
    • Ernst Fehr & Alexander Klein & Klaus M. Schmidt, 2005. "Fairness and Contract Design," Discussion Papers 67, SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich. [Downloadable!]
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  4. Fischbacher, Urs & Gachter, Simon & Fehr, Ernst, 2001. "Are people conditionally cooperative? Evidence from a public goods experiment," Economics Letters, Elsevier, vol. 71(3), pages 397-404, June. [Downloadable!] (restricted)
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  5. Brandts, Jordi & Sola, Carles, 2001. "Reference Points and Negative Reciprocity in Simple Sequential Games," Games and Economic Behavior, Elsevier, vol. 36(2), pages 138-157, August. [Downloadable!] (restricted)
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  13. Gary E. Bolton & Rami Zwick & Elena Katok, 1998. "Dictator game giving: Rules of fairness versus acts of kindness," International Journal of Game Theory, Springer, vol. 27(2), pages 269-299. [Downloadable!] (restricted)
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  16. Ernst Fehr & Simon Gachter, 2000. "Cooperation and Punishment in Public Goods Experiments," American Economic Review, American Economic Association, vol. 90(4), pages 980-994, September. [Downloadable!] (restricted)
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  17. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory Of Fairness, Competition, And Cooperation," The Quarterly Journal of Economics, MIT Press, vol. 114(3), pages 817-868, August. [Downloadable!] (restricted)
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  18. Michael Kosfeld & Akira Okada & Arno Riedl, 2006. "Institution Formation in Public Goods Games," IEW - Working Papers iewwp299, Institute for Empirical Research in Economics - IEW. [Downloadable!]
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  19. Dufwenberg, Martin & Heidhues, Paul & Kirchsteiger, Georg & Riedel, Frank & Sobel, Joel, 2008. "Other-Regarding Preferences in General Equilibrium," CEPR Discussion Papers 6815, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  20. Tore Ellingsen & Magnus Johannesson, 2007. "Paying Respect," Journal of Economic Perspectives, American Economic Association, vol. 21(4), pages 135-150, Fall.
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  24. Falk, Armin & Fischbacher, Urs, 2006. "A theory of reciprocity," Games and Economic Behavior, Elsevier, vol. 54(2), pages 293-315, February. [Downloadable!] (restricted)
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  26. Dirk Engelmann & Martin Strobel, 2006. "Inequality Aversion, Efficiency, and Maximin Preferences in Simple Distribution Experiments: Reply," American Economic Review, American Economic Association, vol. 96(5), pages 1918-1923, December. [Downloadable!]
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