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Are group members less inequality averse than individual decision makers?

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  • He, Haoran
  • Villeval, Marie Claire

Abstract

Do groups exhibit more or less inequality aversion than individuals? Although the previous literature has shown that in many environments individuals in groups make more selfish decisions than when deciding in isolation, we find that individuals express more inequality aversion when making initial proposals in a group decision-making environment compared to an individual decision-making environment. This may be driven by a change in the decision-making environment and by beliefs about the prevailing norm in the group, but we exclude that it is driven by a loss of anonymity or by efficiency concerns. By investigating how groups aggregate individual preferences under a unanimity rule, we show that the members with median social preferences lead the group decisions and a higher inequality aversion compared to the median slows down the convergence process. Overall, final decisions in groups reveal the same level of inequality aversion than individual decisions.

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  • He, Haoran & Villeval, Marie Claire, 2017. "Are group members less inequality averse than individual decision makers?," Journal of Economic Behavior & Organization, Elsevier, vol. 138(C), pages 111-124.
  • Handle: RePEc:eee:jeborg:v:138:y:2017:i:c:p:111-124
    DOI: 10.1016/j.jebo.2017.04.004
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    More about this item

    Keywords

    Group; Inequality aversion; Preference aggregation; Social image; Experiment;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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