Modeling Inequity Aversion in a Dictator Game with Production

Luis José Blas Moreno Garrido () and Ismael Rodríguez Lara
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Luis José Blas Moreno Garrido: Dpto. Fundamentos del Análisis Económico
Ismael Rodríguez Lara: Universidad de Alicante
Authors registered in the RePEc Author Service: Ismael Rodriguez-Lara

Working Papers. Serie AD from Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie)

Abstract: We expand upon the previous models of inequity aversion of Fehr and Schmidt (1999) and Frohlich, Oppenheimer and Kurki (2004), which assume that dictators get disutility if the final allocation of the surplus deviates from the equal split (egalitarian principle) or from the subjects’ production (libertarian principle). In our model, dictators may also account for the way in which the surplus was generated. More precisely, our model incorporates the idea of the liberal egalitarian ethics into the analysis, making it possible for dictators to divide the surplus according to the accountability principle, which states that subjects should only be rewarded for factors under their control. This fairness ideal does not hold subjects responsible for factors beyond their control in the production of the surplus, an idea that is absent in the models of inequity aversion cited above.

Keywords: social preferences; inequity aversion; inequality aversion; egalitarian principle; libertarian principle; accountability principle. (search for similar items in EconPapers)
JEL-codes: D3 D63 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2012-02
New Economics Papers: this item is included in nep-exp and nep-upt
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Citations: View citations in EconPapers (3)

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Journal Article: Modeling Inequity Aversion in a Dictator Game with Production (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:ivi:wpasad:2012-04

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