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Modeling Inequity Aversion in a Dictator Game with Production

  • Luis José Blas Moreno Garrido

    ()

    (Dpto. Fundamentos del Análisis Económico)

  • Ismael Rodríguez Lara

    (Universidad de Alicante)

We expand upon the previous models of inequity aversion of Fehr and Schmidt (1999) and Frohlich, Oppenheimer and Kurki (2004), which assume that dictators get disutility if the final allocation of the surplus deviates from the equal split (egalitarian principle) or from the subjects’ production (libertarian principle). In our model, dictators may also account for the way in which the surplus was generated. More precisely, our model incorporates the idea of the liberal egalitarian ethics into the analysis, making it possible for dictators to divide the surplus according to the accountability principle, which states that subjects should only be rewarded for factors under their control. This fairness ideal does not hold subjects responsible for factors beyond their control in the production of the surplus, an idea that is absent in the models of inequity aversion cited above.

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Paper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie AD with number 2012-04.

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Length: 19 pages
Date of creation: Feb 2012
Date of revision:
Publication status: Published by Ivie
Handle: RePEc:ivi:wpasad:2012-04
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  1. Christoph Engel, 2010. "Dictator Games: A Meta Study," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2010_07, Max Planck Institute for Research on Collective Goods, revised Jan 2011.
  2. Marc Fleurbaey & Francois Maniquet, 2002. "Fair Income Tax," Economics Working Papers 0021, Institute for Advanced Study, School of Social Science.
  3. Fehr, Ernst & Klein, Alexander & Schmidt, Klaus M., 2005. "Fairness and Contract Design," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 67, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  4. repec:dgr:uvatin:20080098 is not listed on IDEAS
  5. Alberto Alesina & George-Marios Angeletos, 2005. "Fairness and Redistribution," American Economic Review, American Economic Association, vol. 95(4), pages 960-980, September.
  6. James Konow, 2001. "A Positive Theory of Economic Fairness," Levine's Working Paper Archive 563824000000000138, David K. Levine.
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  8. Oxoby, Robert J. & Spraggon, John, 2008. "Mine and yours: Property rights in dictator games," Journal of Economic Behavior & Organization, Elsevier, vol. 65(3-4), pages 703-713, March.
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    • Cappelen, Alexander W. & Tungodden, Bertil, 2004. "Rewarding effort," Memorandum 15/2004, Oslo University, Department of Economics.
  11. Konow, James, 2001. "Fair and square: the four sides of distributive justice," Journal of Economic Behavior & Organization, Elsevier, vol. 46(2), pages 137-164, October.
  12. John A. List, 2007. "On the Interpretation of Giving in Dictator Games," Journal of Political Economy, University of Chicago Press, vol. 115, pages 482-493.
  13. James Konow, 2000. "Fair Shares: Accountability and Cognitive Dissonance in Allocation Decisions," American Economic Review, American Economic Association, vol. 90(4), pages 1072-1091, September.
  14. Croson, Rachel & Konow, James, 2009. "Social preferences and moral biases," Journal of Economic Behavior & Organization, Elsevier, vol. 69(3), pages 201-212, March.
  15. Paloma Ubeda, 2010. "The Consistency of Fairness Rules: An Experimental Study," Discussion Papers 2010005, University of Oxford, Nuffield College.
  16. Alexander W. Cappelen & Astri Drange Hole & Erik Ø Sørensen & Bertil Tungodden, 2007. "The Pluralism of Fairness Ideals: An Experimental Approach," American Economic Review, American Economic Association, vol. 97(3), pages 818-827, June.
  17. Fehr, Ernst & Schmidt, Klaus M., 1999. "A theory of fairness, competition, and cooperation," Munich Reprints in Economics 20650, University of Munich, Department of Economics.
  18. Marc Fleurbaey & Walter Bossert, 1996. "Redistribution and compensation (*)," Social Choice and Welfare, Springer, vol. 13(3), pages 343-355.
  19. Luis Miller & Paloma Ubeda, 2010. "Are Women More Sensitive to the Decision-Making Context?," Discussion Papers 2010004, University of Oxford, Nuffield College.
  20. Almås, Ingvild & Cappelen, Alexander W. & Lind, Jo Thori & Sørensen, Erik Ø. & Tungodden, Bertil, 2011. "Measuring unfair (in)equality," Journal of Public Economics, Elsevier, vol. 95(7-8), pages 488-499, August.
  21. James Konow, 2003. "Which Is the Fairest One of All? A Positive Analysis of Justice Theories," Journal of Economic Literature, American Economic Association, vol. 41(4), pages 1188-1239, December.
  22. Todd L. Cherry & Peter Frykblom & Jason F. Shogren, 2002. "Hardnose the Dictator," American Economic Review, American Economic Association, vol. 92(4), pages 1218-1221, September.
  23. Ismael Rodriguez-Lara & Luis Moreno-Garrido, 2012. "Self-interest and fairness: self-serving choices of justice principles," Experimental Economics, Springer, vol. 15(1), pages 158-175, March.
  24. Alexander W. Cappelen & Karl Ove Moene & Erik Ø. Sørensen & Bertil Tungodden, 2008. "Rich Meets Poor - an International Fairness Experiment," CMI Working Papers 10, CMI (Chr. Michelsen Institute), Bergen, Norway.
  25. FLEURBAEY, Marc & MANIQUET, François, . "Compensation and responsibility," CORE Discussion Papers RP -2284, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  26. Bertil Tungodden, 2001. "Responsibility and Redistribution: The Case of First Best Taxation," CESifo Working Paper Series 545, CESifo Group Munich.
  27. Cappelen, Alexander W. & Sørensen, Erik Ø. & Tungodden, Bertil, 2010. "Responsibility for what? Fairness and individual responsibility," European Economic Review, Elsevier, vol. 54(3), pages 429-441, April.
  28. Ruffle, Bradley J., 1998. "More Is Better, But Fair Is Fair: Tipping in Dictator and Ultimatum Games," Games and Economic Behavior, Elsevier, vol. 23(2), pages 247-265, May.
  29. Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March.
  30. Norman Frohlich & Joe Oppenheimer & Anja Kurki, 2004. "Modeling Other-Regarding Preferences and an Experimental Test," Public Choice, Springer, vol. 119(1_2), pages 91-117, 04.
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