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Inequality Aversion, Efficiency, and Maximin Preferences in Simple Distribution Experiments

Article
Author/s: 
Martin Strobel and Dirk Engelmann
American Economic Review
Issue number: 
4
Year: 
2004
Journal pages: 
857-869
Webpage [1]
We present simple one-shot distribution experiments comparing the relative importance of efficiency concerns, maximin preferences, and inequality aversion, as well as the relative performance of the fairness theories by Gary E Bolton and Axel Ockenfels and by Ernst Fehr and Klaus M. Schmidt. While the Fehr-Schmidt theory performs better in a direct comparison, this appears to be due to being in line with maximin preferences. More importantly, we find that a combination of efficiency concerns, maximin preferences, and selfishness can rationalize most of the data while the Bolton-Ockenfels and Fehr-Schmidt theories are unable to explain important patterns.
Tags: 
Experiments [2]

Source URL:http://coalitiontheory.net/content/inequality-aversion-efficiency-and-maximin-preferences-simple-distribution-experiments

Links
[1] http://ideas.repec.org/a/aea/aecrev/v94y2004i4p857-869.html [2] http://coalitiontheory.net/research-areas/experiments