IDEAS home Printed from https://ideas.repec.org/p/jrp/jrpwrp/2012-023.html
   My bibliography  Save this paper

On the Context-Dependency of Inequality Aversion - Experimental Evidence and a Stylized Model -

Author

Listed:
  • Agnes Bäker

    () (University of Tübingen, Faculty of Economics and Social Sciences, Germany)

  • Werner Güth

    () (Max Planck Institute of Economics, Strategic Interaction Groupm Jena)

  • Kerstin Pull

    () (University of Tübingen, Faculty of Economics and Social Sciences, Germany)

  • Manfred Stadler

    () (University of Tübingen, Faculty of Economics and Social Sciences, Germany)

Abstract

We consider three-person envy games with a proposer, a responder, and a dummy player. In this class of games, the proposer, rather than allocating a constant pie, chooses the pie size which the responder can then accept or reject while the dummy player can only refuse his own share. While the agreement payoffs for the responder and the dummy are exogenously given, the proposer acts as the residual claimant who - in case of responder acceptance - receives whatever is left after the two exogenously given agreement payoffs have been deducted from the pie. Consistent with earlier findings from three-person generosity games, we find inequality aversion to be strongly context-dependent and affected by the (in)equality of exogenously given agreement payoffs. Motivated by these findings, we present a stylized model on context-dependent inequality aversion that accounts for the observed effects.

Suggested Citation

  • Agnes Bäker & Werner Güth & Kerstin Pull & Manfred Stadler, 2012. "On the Context-Dependency of Inequality Aversion - Experimental Evidence and a Stylized Model -," Jena Economic Research Papers 2012-023, Friedrich-Schiller-University Jena.
  • Handle: RePEc:jrp:jrpwrp:2012-023
    as

    Download full text from publisher

    File URL: http://pubdb.wiwi.uni-jena.de/pdf/wp_2012_023.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Simona Cicognani & Anna D’Ambrosio & Werner Güth & Simone Pfuderer & Matteo Ploner, 2015. "Community projects: an experimental analysis of a fair implementation process," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 44(1), pages 109-132, January.
    2. Gary Charness & Matthew Rabin, 2002. "Understanding Social Preferences with Simple Tests," The Quarterly Journal of Economics, Oxford University Press, vol. 117(3), pages 817-869.
    3. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory of Fairness, Competition, and Cooperation," The Quarterly Journal of Economics, Oxford University Press, vol. 114(3), pages 817-868.
    4. David K. Levine, 1998. "Modeling Altruism and Spitefulness in Experiment," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 1(3), pages 593-622, July.
    5. 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.
    6. Forsythe Robert & Horowitz Joel L. & Savin N. E. & Sefton Martin, 1994. "Fairness in Simple Bargaining Experiments," Games and Economic Behavior, Elsevier, vol. 6(3), pages 347-369, May.
    7. Werner Güth & Kerstin Pull & Manfred Stadler & Agnes Stribeck, 2010. "Equity versus Efficiency? Evidence from Three-Person Generosity Experiments," Games, MDPI, Open Access Journal, vol. 1(2), pages 1-14, April.
    8. Kirchsteiger, Georg, 1994. "The role of envy in ultimatum games," Journal of Economic Behavior & Organization, Elsevier, vol. 25(3), pages 373-389, December.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Experimental economics; envy game;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jrp:jrpwrp:2012-023. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Markus Pasche). General contact details of provider: http://www.jenecon.de .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.