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Type | Working Paper |
Scope | Discipline-based scholarship |
Title | How Exposure to Markets Can Favor Inequity-Averse Preferences |
Organization Unit | |
Authors |
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Language |
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Institution | University of Zurich |
Series Name | Working paper series / Institute for Empirical Research in Economics |
Number | No. 473 |
ISSN | 1424-0459 |
Date | 2010 |
Abstract Text | This paper shows how non-individualistic preferences can be individual fitness maximizing in the presence of general equilibrium externalities. In the model, individuals share an endowment, which can be consumed on its own and/or used as a means of exchange to purchase goods from merchants on the external market if such exists. Assuming that increased consumption means increased individual fitness, we show that inequity-averse behavior with respect to endowment distribution can benan optimal response to merchants' price discrimination and lead to the evolution ofninequity-averse preferences. The findings presented here are supported by empirical evidence on the endogeniety of people's preferences with respect to exposure to market exchange. |
Official URL | http://www.econ.uzh.ch/wp.html |
PDF File | Download from ZORA |
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