Stochastic Expected Inequity-Averse Choice

Yosuke Hashidate () and Keisuke Yoshihara ()
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Keisuke Yoshihara: Gunma University

Economics Bulletin, 2021, vol. 41, issue 3, 1843-1848

Abstract: This note studies stochastic inequity-averse choice behavior, capturing ex-post fairness and ex-ante fairness. By studying deliberate randomization, we characterize the stochastic choice behavior stemming from Saito [Social Preferences under Risk: Equality of Opportunity versus Equality of Outcome, American Economic Review, 103 (7): 3084-3101]. We find that the violations of first order stochastic dominance (FOSD) and Regularity occur, and that ex-ante fairness can lead to preference reversal phenomena.

Keywords: Inequity Aversion; Ex-Ante Fairness; Ex-Post Fairness; Deliberate Randomization. (search for similar items in EconPapers)
JEL-codes: C7 D8 (search for similar items in EconPapers)
Date: 2021-09-17
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Citations: View citations in EconPapers (1)

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