Social Preferences II created 2011.03.23

Social Preferences II created 2011.03.23 - inequities than...

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Social Preferences II
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The Fehr-Schmidt (1999) In the literature, there is evidence for fairness, selfishness, and cooperation motives Is it possible to explain all these different findings in a single model? If there are people who are motivated by fairness considerations as well as people who are purely selfish. Fehr-Schmidt models fairness as self- centered inequity aversion. Inequity averse Self-centered
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The Fehr-Schmidt Model Assume that there are purely selfish subjects and there are subjects who dislike inequitable outcomes They are affected more by disadvantages
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Unformatted text preview: inequities than advantages ones The Fehr-Schmidt Model The Fehr-Schmidt Model Ultimatum Games • Regularities observed in ultimatum games – No offers above 50% – Offers generally are between 40% and 50% – Almost no offers below 20% – Low offers are frequently rejected – Probability of rejection decreases with the offered amount Applying FS Model to Ultimatum Games • Suppose – proposer’s preferences are represented by ( α 1 , β 1 ) – Responder’s preferences are represented by ( α 2 , β 2 )...
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Social Preferences II created 2011.03.23 - inequities than...

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