Stability and explanatory power of inequality aversion: an investigation of the house money effect
In this paper, we analyse if individual inequality aversion measured with simple experimental games depends on whether the monetary endowment in these games is either a windfall gain ("house money") or a reward for a certain effort-related performance. Moreover, we analyse whether the way of preference elicitation affects the explanatory power of inequality aversion in social dilemma situations. Our results indicate that individual inequality aversion is not generally robust to the way endowments emerge. Furthermore, the use of money earned by real efforts instead of house money does not improve the generally low predictive power of the inequality aversion model. Hypotheses based on the inequality aversion model lose their predictive power when preferences are elicited with earned money.
|Date of creation:||2010|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.zew.de/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Linda Babcock & George Loewenstein, 1997. "Explaining Bargaining Impasse: The Role of Self-Serving Biases," Journal of Economic Perspectives, American Economic Association, vol. 11(1), pages 109-126, Winter.
- Sturm, Bodo & Riechmann, Thomas & Dannenberg, Astrid & Vogt, Carsten, 2007.
"Inequity Aversion and Individual Behavior in Public Good Games: An Experimental Investigation,"
ZEW Discussion Papers
07-034 [rev.], ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Dannenberg, Astrid & Riechmann, Thomas & Sturm, Bodo & Vogt, Carsten, 2007. "Inequity Aversion and Individual Behavior in Public Good Games: An Experimental Investigation," ZEW Discussion Papers 07-034, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Sabrina Teyssier, 2009.
"Inequity and Risk Aversion in Sequential Public Good Games,"
TWI Research Paper Series
47, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
- Sabrina Teyssier, 2012. "Inequity and risk aversion in sequential public good games," Public Choice, Springer, vol. 151(1), pages 91-119, April.
- Sabrina Teyssier, 2009. "Inequity and Risk Aversion in Sequential Public Good Games," Working Papers 0919, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure.
- Sabrina Teyssier, 2009. "Inequity and Risk Aversion in Sequential Public Good Games," Post-Print halshs-00422669, HAL.
- Todd L. Cherry & Stephan Kroll & Jason F. Shogren, 2003.
"The Impact of Endowment Heterogeneity and Origin on Public Good Contributions: Evidence from the Lab,"
03-05, Department of Economics, Appalachian State University.
- Cherry, Todd L. & Kroll, Stephan & Shogren, Jason F., 2005. "The impact of endowment heterogeneity and origin on public good contributions: evidence from the lab," Journal of Economic Behavior & Organization, Elsevier, vol. 57(3), pages 357-365, July.
- Avner Ben-Ner & Famin Kong & Louis Putterman & Dan Magan, .
"Reciprocity in a Two-Part Dictator Game,"
0902, Human Resources and Labor Studies, University of Minnesota (Twin Cities Campus).
- Jeremy Clark, 2002. "House Money Effects in Public Good Experiments," Experimental Economics, Springer, vol. 5(3), pages 223-231, December.
- Ernst Fehr & Simon Gaechter, 1999.
"Cooperation and Punishment in Public Goods Experiments,"
CESifo Working Paper Series
183, CESifo Group Munich.
- Simon Gachter & Ernst Fehr, 2000. "Cooperation and Punishment in Public Goods Experiments," American Economic Review, American Economic Association, vol. 90(4), pages 980-994, September.
- Ernst Fehr & Simon Gaechter, . "Cooperation and Punishment in Public Goods Experiments," IEW - Working Papers 010, Institute for Empirical Research in Economics - University of Zurich.
- Keasey, Kevin & Moon, Philip, 1996. "Gambling with the house money in capital expenditure decisions: An experimental analysis," Economics Letters, Elsevier, vol. 50(1), pages 105-110, January.
- Jeanette Brosig & Thomas Riechmann & Joachim Weimann, 2007.
"Selfish in the end? An investigation of consistency and stability of individual behaviour,"
FEMM Working Papers
07005, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
- Brosig, Jeannette & Riechmann, Thomas & Weimann, Joachim, 2007. "Selfish in the End?:An Investigation of Consistency and Stability of individual Behavior," MPRA Paper 2035, University Library of Munich, Germany.
- Keeler, James P & James, William L & Abdel-Ghany, Mohamed, 1985. "The Relative Size of Windfall Income and the Permanent Income Hypothesis," Journal of Business & Economic Statistics, American Statistical Association, vol. 3(3), pages 209-15, June.
- Cherry, Todd L., 2001. "Mental accounting and other-regarding behavior: Evidence from the lab," Journal of Economic Psychology, Elsevier, vol. 22(5), pages 605-615, October.
- Lucy Ackert & Narat Charupat & Bryan Church & Richard Deaves, 2006.
"An experimental examination of the house money effect in a multi-period setting,"
Springer, vol. 9(1), pages 5-16, April.
- Lucy F. Ackert & Narat Charupat & Bryan K. Church & James Tompkins & Richard Deaves, 2003. "An experimental examination of the house money effect in a multi-period setting," Working Paper 2003-13, Federal Reserve Bank of Atlanta.
- Blanco, Mariana & Engelmann, Dirk & Normann, Hans-Theo, 2010.
"A within-subject analysis of other-regarding preferences,"
DICE Discussion Papers
06, Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
- Blanco, Mariana & Engelmann, Dirk & Normann, Hans Theo, 2011. "A within-subject analysis of other-regarding preferences," Games and Economic Behavior, Elsevier, vol. 72(2), pages 321-338, June.
- Ockenfels, Axel & Weimann, Joachim, 1999. "Types and patterns: an experimental East-West-German comparison of cooperation and solidarity," Journal of Public Economics, Elsevier, vol. 71(2), pages 275-287, February.
- Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
- Hoffman Elizabeth & McCabe Kevin & Shachat Keith & Smith Vernon, 1994. "Preferences, Property Rights, and Anonymity in Bargaining Games," Games and Economic Behavior, Elsevier, vol. 7(3), pages 346-380, November.
- 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.
- Eckel, Catherine C. & Grossman, Philip J., 1996. "Altruism in Anonymous Dictator Games," Games and Economic Behavior, Elsevier, vol. 16(2), pages 181-191, October.
- Richard H. Thaler & Eric J. Johnson, 1990. "Gambling with the House Money and Trying to Break Even: The Effects of Prior Outcomes on Risky Choice," Management Science, INFORMS, vol. 36(6), pages 643-660, June.
When requesting a correction, please mention this item's handle: RePEc:zbw:zewdip:10006. 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: (ZBW - German National Library of Economics)
If references are entirely missing, you can add them using this form.