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On inequity aversion: A reply to Binmore and Shaked

  • Fehr, Ernst
  • Schmidt, Klaus M.

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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Paper provided by University of Munich, Department of Economics in its series Munich Reprints in Economics with number 20653.

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Date of creation: 2010
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Publication status: Published in Journal of Economic Behavior and Organization 1 73(2010): pp. 101-108
Handle: RePEc:lmu:muenar:20653
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  1. 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.
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  13. Fehr, Ernst & Schmidt, Klaus M., 2004. "Fairness and Incentives in a Multi-Task Principal-Agent Model," Discussion Papers in Economics 335, University of Munich, Department of Economics.
  14. Goeree, Jacob K. & Riedl, Arno & Ule, Aljaz, 2005. "In Search of Stars: Network Formation among Heterogeneous Agents," IZA Discussion Papers 1754, Institute for the Study of Labor (IZA).
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  17. Klaus M. Schmidt, 2009. "The Role of Experiments for the Development of Economic Theories," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 10(s1), pages 14-30, 05.
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  19. Charles Bellemare & Sabine Kroger & Arthur van Soest, 2007. "Preferences, Intentions, and Expectations: a Large-Scale Experiment with a Representative Subject Pool," Cahiers de recherche 0721, CIRPEE.
  20. Armin Falk & Ernst Fehr & Urs Fischbacher, . "Testing Theories of Fairness - Intentions Matter," IEW - Working Papers 063, Institute for Empirical Research in Economics - University of Zurich.
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  22. Gary E. Bolton & Rami Zwick & Elena Katok, 1998. "Dictator game giving: Rules of fairness versus acts of kindness," International Journal of Game Theory, Springer;Game Theory Society, vol. 27(2), pages 269-299.
  23. Ernst Fehr & Klaus M. Schmidt, 2005. "The Rhetoric of Inequity Aversion – Reply," Levine's Bibliography 666156000000000574, UCLA Department of Economics.
  24. Armin Falk & Ernst Fehr & Urs Fischbacher, 2003. "On the Nature of Fair Behavior," Economic Inquiry, Western Economic Association International, vol. 41(1), pages 20-26, January.
  25. Anna Conte & John D Hey & Peter G Moffatt, 2007. "Mixture Models of Choice Under Risk," Discussion Papers 07/06, Department of Economics, University of York.
  26. Tore Ellingsen & Magnus Johannesson, 2007. "Paying Respect," Journal of Economic Perspectives, American Economic Association, vol. 21(4), pages 135-150, Fall.
  27. Martin Dufwenberg & Paul Heidues & Georg Kirchsteiger & Frank Riedel & Joel Sobel, 2008. "Other-Regarding Preferences in General Equilibrium," Working Papers ECARES 2008-011, ULB -- Universite Libre de Bruxelles.
  28. Fehr, Ernst & Schmidt, Klaus M., 2001. "Theories of Fairness and Reciprocity," Discussion Papers in Economics 14, University of Munich, Department of Economics.
  29. Gary Bolton & Jordi Brandts & Axel Ockenfels, 1998. "Measuring Motivations for the Reciprocal Responses Observed in a Simple Dilemma Game," Experimental Economics, Springer;Economic Science Association, vol. 1(3), pages 207-219, December.
  30. Ernst Fehr & Michael Naef & Klaus M. Schmidt, 2006. "Inequality Aversion, Efficiency, and Maximin Preferences in Simple Distribution Experiments: Comment," American Economic Review, American Economic Association, vol. 96(5), pages 1912-1917, December.
  31. Cox, James C., 2004. "How to identify trust and reciprocity," Games and Economic Behavior, Elsevier, vol. 46(2), pages 260-281, February.
  32. Bellemare, C. & Kroger, S. & van Soest, A.H.O., 2008. "Measuring inequity aversion in a heterogeneous population using experimental decisions and subjective probabilities," Other publications TiSEM f17bda32-98f9-4580-ab3f-6, Tilburg University, School of Economics and Management.
  33. Dirk Engelmann & Martin Strobel, 2004. "Inequality Aversion, Efficiency, and Maximin Preferences in Simple Distribution Experiments," American Economic Review, American Economic Association, vol. 94(4), pages 857-869, September.
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  38. Dana, Jason & Cain, Daylian M. & Dawes, Robyn M., 2006. "What you don't know won't hurt me: Costly (but quiet) exit in dictator games," Organizational Behavior and Human Decision Processes, Elsevier, vol. 100(2), pages 193-201, July.
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