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Justice among strangers. On altruism, inequality aversion and fairness

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  • Luciano Andreozzi

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  • Matteo Ploner

    ()

  • Ivan Soraperra

Abstract

We present an axiomatic model of choice involving two agents, motivated by the experimental evidence on non-selfish preferences. We distinguish two classes of social preferences, depending on whether they are or not separable. Altruism and spite (Andreoni & Miller, 2002; Cox et al., 2007) are separable, while the various forms of inequality aversion are not (Fehr & Schmidt, 1999; Bolton & Ockenfels, 2000; Charness & Rabin, 2002). Separable and non-separable preferences give very close predictions when only sure outcomes are involved, but they make opposite predictions in choices involving lotteries. We show this by proposing a generalization of expected utility that accounts for preferences for �fair procedures�, which violate the independence axiom. An experimental test of the model reveals little evidence of ex-post inequality aversion, even when non-expected utility preferences are accounted for.

Suggested Citation

  • Luciano Andreozzi & Matteo Ploner & Ivan Soraperra, 2013. "Justice among strangers. On altruism, inequality aversion and fairness," CEEL Working Papers 1304, Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia.
  • Handle: RePEc:trn:utwpce:1304
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    File URL: http://www-ceel.economia.unitn.it/papers/papero13_04.pdf
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    References listed on IDEAS

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    Cited by:

    1. Alexia Gaudeul, 2013. "Social preferences under uncertainty," Jena Economic Research Papers 2013-024, Friedrich-Schiller-University Jena.
    2. Stefan T. Trautmann & Gijs Kuilen, 2016. "Process fairness, outcome fairness, and dynamic consistency: Experimental evidence for risk and ambiguity," Journal of Risk and Uncertainty, Springer, vol. 53(2), pages 75-88, December.
    3. Gianluca Grimalda & Anirban Kar & Eugenio Proto, 2016. "Procedural fairness in lotteries assigning initial roles in a dynamic setting," Experimental Economics, Springer;Economic Science Association, vol. 19(4), pages 819-841, December.

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