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Fairness in risky environments: theory and evidence
- 1.0351411 - NHU-C 2011 CZ eng J - Journal Article
Babický, V. - Ortmann, Andreas - van Koten, Silvester
Fairness in risky environments: theory and evidence.
CERGE-EI Working Paper Series. -, č. 419 (2010), s. 1-32. ISSN 1211-3298
R&D Projects: GA MŠk(CZ) LC542
Institutional research plan: CEZ:MSM0021620846
Keywords : fairness * risk aversion * subject pool effects * economics experiments
Subject RIV: AH - Economics
Using three simple allocation problems generally known as dictator, ultimatum and trust games, we explore the influence of ex-ante unknown pie size of varying degrees of risk on individual behavior. We derive theoretical predictions for two of these games using utility functions that capture additively separable constant relative risk aversion and inequity aversion. We test the theoretical predictions experimentally on two different subject pools: students of Czech Technical University and employees of Prague City Hall. We control for the risk attitude of our subjects through a variant of the Holt-Laury assessment instrument.
Permanent Link: http://hdl.handle.net/11104/0191170