Fairness vs. Social Welfare in Experimental Decisions

Stefan Kohler

No ECO2005/11, Economics Working Papers from European University Institute

Abstract: Experimental evidence from modified dictator games and simple choice situations indicates that concern for overall welfare is an important motive in human decision making. Models of inequality averse agents, as suggested by Fehr and Schmidt (1999) or Bolton and Ockenfels (2000), fall short in explaining behavior of proposers, who reduce their payoff below a fair split of the endowment to maximize social welfare, while other types of social preferences do well on these data. This has created the impression that inequality aversion is a misguided concept. This paper presents a formal model and shows that a combination of welfare concern and inequality aversion changes this result in favor of inequality aversion. It also establishes a unique link between altruism and social welfare in the proposed model.

Keywords: Social Preferences; Inequality Aversion; Welfare Concern; Reciprocity (search for similar items in EconPapers)
JEL-codes: A13 B49 C70 D63 D64 (search for similar items in EconPapers)
Date: 2005
New Economics Papers: this item is included in nep-cbe, nep-cdm, nep-exp and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://cadmus.iue.it/dspace/bitstream/1814/3338/1/ECO2005-11.pdf main text
Our link check indicates that this URL is bad, the error code is: 404 Not Found

Related works:
Journal Article: Altruism and fairness in experimental decisions (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eui:euiwps:eco2005/11

Access Statistics for this paper

More papers in Economics Working Papers from European University Institute Badia Fiesolana, Via dei Roccettini, 9, 50014 San Domenico di Fiesole (FI) Italy. Contact information at EDIRC.
Bibliographic data for series maintained by Cécile Brière ().