How not to extend models of inequality aversion

0376220 - NHÚ 2013 RIV NL eng J - Journal Article
Engelmann, Dirk
How not to extend models of inequality aversion.
Journal of Economic Behavior & Organization. Roč. 81, č. 2 (2012), s. 599-605. ISSN 0167-2681. E-ISSN 1879-1751
Institutional research plan: CEZ:AV0Z70850503
Keywords : inequality aversion * efficiency * social preferences
Subject RIV: AH - Economics
Impact factor: 1.065, year: 2012

Several authors have made attempts to improve the explanatory power of models of inequality aversion, in particular the one by Fehr and Schmidt (1999), by adding concerns for total surplus or efficiency. In this note, I point out that these attempts are misguided because they are equivalent to a much simpler change, not requiring an additional parameter, unless we simultaneously consider games with different numbers of players. In the latter case, however, such an approach yields implausible predictions.
Permanent Link: http://hdl.handle.net/11104/0208682