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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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File URL: https://epub.ub.uni-muenchen.de/13296/1/256.pdf
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Paper provided by Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich in its series Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems with number 256.

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Date of creation: Feb 2009
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Handle: RePEc:trf:wpaper:256
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  1. Falk, Armin & Fehr, Ernst & Fischbacher, Urs, 2008. "Testing theories of fairness--Intentions matter," Games and Economic Behavior, Elsevier, vol. 62(1), pages 287-303, January.
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  3. Kosfeld Michael & Okada Akira & Riedl Arno, 2006. "Institution Formation in Public Goods Games," Research Memorandum 029, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  4. John Kagel & Katherine Wolfe, 2001. "Tests of Fairness Models Based on Equity Considerations in a Three-Person Ultimatum Game," Experimental Economics, Springer, vol. 4(3), pages 203-219, December.
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  6. Ernst Fehr & Simon Gaechter, 1999. "Cooperation and Punishment in Public Goods Experiments," CESifo Working Paper Series 183, CESifo Group Munich.
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  9. Ernst Fehr & Klaus M. Schmidt, . "Fairness and Incentives in a Multi-Task Principal-Agent Model," IEW - Working Papers 191, Institute for Empirical Research in Economics - University of Zurich.
  10. Charles Bellemare & Sabine Kröger & Arthur van Soest, 2008. "Measuring Inequity Aversion in a Heterogeneous Population Using Experimental Decisions and Subjective Probabilities," Econometrica, Econometric Society, vol. 76(4), pages 815-839, 07.
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  13. Fehr, Ernst & Schmidt, Klaus M., . "A theory of fairness, competition, and cooperation," Chapters in Economics, University of Munich, Department of Economics.
  14. Adrian Bruhin & Helga Fehr-Duda & Thomas Epper, 2007. "Risk and Rationality: Uncovering Heterogeneity in Probability Distortion," SOI - Working Papers 0705, Socioeconomic Institute - University of Zurich, revised Jul 2007.
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  17. Aljaž Ule & Jacob K. Goeree & Arno Riedl, 2007. "In Search of Stars: Network Formation among Heterogeneous Agents," Working Papers 2007.65, Fondazione Eni Enrico Mattei.
  18. Falk, Armin & Fehr, Ernst & Fischbacher, Urs, 2001. "On the Nature of Fair Behaviour," CEPR Discussion Papers 2984, C.E.P.R. Discussion Papers.
  19. Gary Charness & Matthew Rabin, 2003. "Understanding Social Preferences with Simple Tests," General Economics and Teaching 0303002, EconWPA.
  20. Korenok Oleg & Edward L. Millner & Laura Razzolini, 2008. "Experimental Evidence on Other-Regarding Preferences: Dictators Give to Help the Less Fortunate," Working Papers 0807, VCU School of Business, Department of Economics, revised Aug 2009.
  21. 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.
  22. Ernst Fehr & Klaus M. Schmidt, 2005. "The Rhetoric of Inequity Aversion – Reply," Levine's Bibliography 666156000000000574, UCLA Department of Economics.
  23. 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.
  24. Martin Dufwenberg & Paul Heidhues & Georg Kirchsteiger & Frank Riedel & Joel Sobel, 2011. "Other-Regarding Preferences in General Equilibrium," Review of Economic Studies, Oxford University Press, vol. 78(2), pages 613-639.
  25. Binmore, K & Shaked, A & Sutton, J, 1985. "Testing Noncooperative Bargaining Theory: A Preliminary Study," American Economic Review, American Economic Association, vol. 75(5), pages 1178-80, December.
  26. Schmidt, Klaus M., 2009. "The role of experiments for the development of economic theories," Munich Reprints in Economics 19767, University of Munich, Department of Economics.
  27. James Andreoni & Marco Castillo & Ragan Petrie, 2003. "What Do Bargainers' Preferences Look Like? Experiments with a Convex Ultimatum Game," American Economic Review, American Economic Association, vol. 93(3), pages 672-685, June.
  28. 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.
  29. Gary Bolton & Jordi Brandts & Axel Ockenfels, 1998. "Measuring Motivations for the Reciprocal Responses Observed in a Simple Dilemma Game," Experimental Economics, Springer, vol. 1(3), pages 207-219, December.
  30. 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.
  31. Avner Shaked, 2005. "The Rhetoric of Inequity Aversion," Levine's Bibliography 666156000000000570, UCLA Department of Economics.
  32. Fehr, Ernst & Schmidt, Klaus M., 2001. "Theories of Fairness and Reciprocity," Discussion Papers in Economics 14, University of Munich, Department of Economics.
  33. Brandts, Jordi & Sola, Carles, 2001. "Reference Points and Negative Reciprocity in Simple Sequential Games," Games and Economic Behavior, Elsevier, vol. 36(2), pages 138-157, August.
  34. Roth, Alvin E. & Vesna Prasnikar & Masahiro Okuno-Fujiwara & Shmuel Zamir, 1991. "Bargaining and Market Behavior in Jerusalem, Ljubljana, Pittsburgh, and Tokyo: An Experimental Study," American Economic Review, American Economic Association, vol. 81(5), pages 1068-95, December.
  35. Cox, James C., 2004. "How to identify trust and reciprocity," Games and Economic Behavior, Elsevier, vol. 46(2), pages 260-281, February.
  36. 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.
  37. Avner Shaked, 2005. "The Rhetoric of Inequity Aversion," NajEcon Working Paper Reviews 666156000000000612, www.najecon.org.
  38. Offerman, Theo, 2002. "Hurting hurts more than helping helps," European Economic Review, Elsevier, vol. 46(8), pages 1423-1437, September.
  39. James Andreoni & John Miller, 2002. "Giving According to GARP: An Experimental Test of the Consistency of Preferences for Altruism," Econometrica, Econometric Society, vol. 70(2), pages 737-753, March.
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