Inequity Aversion May Increase Inequity

Inequity aversion models have been used to explain equitable payoff divisions in bargaining games. I show that inequity aversion can actually increase the asymmetry of payoff division if unanimity is not required. This is due to the analogy between inequity aversion and risk aversion. Inequity aversion may also affect comparative statics: the advantage of being proposer can decrease as players become more impatient.


Issue Date:
2006
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/12166
Total Pages:
20
Series Statement:
CTN Nota di Lavoro 80.2006




 Record created 2017-04-01, last modified 2017-08-23

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