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Social Preferences under Risk: Equality of Opportunity versus Equality of Outcome

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  • Kota Saito

Abstract

This paper axiomatizes a utility function for social preferences under risk. In the model, a single parameter captures a preference for equality of opportunity (i.e., equality of exante expected payoffs) relative to equality of outcome (i.e., equality of ex-post payoffs). In a deterministic environment, the model reduces to the model of Fehr and Schmidt (1999). The model is consistent with recent experiments on probabilistic dictator games.

Suggested Citation

  • 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.
    • Handle: RePEc:aea:aecrev:v:103:y:2013:i:7:p:3084-3101
    Note: DOI: 10.1257/aer.103.7.3084
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    References listed on IDEAS

    as
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    7. Fehr, Ernst & Schmidt, Klaus M., 2006. "The Economics of Fairness, Reciprocity and Altruism - Experimental Evidence and New Theories," Handbook on the Economics of Giving, Reciprocity and Altruism, in: S. Kolm & Jean Mercier Ythier (ed.), Handbook of the Economics of Giving, Altruism and Reciprocity, edition 1, volume 1, chapter 8, pages 615-691, Elsevier.
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    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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