How exposure to markets can favor inequity-averse preferences
Robertas Zubrickas ()
Journal of Economic Behavior & Organization, 2012, vol. 84, issue 1, 174-181
This paper shows how market exposure can support the evolution of non-individualistic preferences. In a group, one agent is randomly selected to divide an exogenous endowment. Endowment shares are used for either consumption or market exchange with external merchants. As a more equal endowment distribution attenuates the scope of merchants’ price discrimination, we argue that inequity-averse preferences may lead to a higher utility of consumption and so survive evolutionary pressures. This effect arises from an opportunity to create and extract information rents. We offer a new explanation to the empirical finding that a society's exposure to markets has a positive effect on its members’ sociality.
Keywords: Evolution of preferences; Market integration; Inequity aversion; Screening; Cross-societal differences (search for similar items in EconPapers)
JEL-codes: A10 C73 D63 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:84:y:2012:i:1:p:174-181
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