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| Type | Working Paper |
| Scope | Discipline-based scholarship |
| Title | How Exposure to Markets Can Favor Inequity-Averse Preferences |
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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 |
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