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The willingness to pay for partial vs. universal equality: insights from three-person envy games


Bäker, Agnes; Güth, Werner; Pull, Kerstin; Stadler, Manfred (2015). The willingness to pay for partial vs. universal equality: insights from three-person envy games. Journal of Behavioral and Experimental Economics, 56(06):55-61.

Abstract

In three-person envy games, an allocator, a responder, and a dummy player interact. Since agreement payoffs of responder and dummy are exogenously given, there is no tradeoff between allocator payoff and the payoffs of responder and dummy. Rather, the allocator chooses the size of the pie and thus—being the residual claimant—defines his own payoff. While in the dictator variant of the envy game, responder and dummy can only refuse their own shares, in the ultimatum variant, the responder can accept or reject the allocator’s choice with rejection leading to zero payoffs for all three players. Comparing symmetric and asymmetric agreement payoffs for responder and dummy shows that equality concerns are significantly context-dependent: allocators are willing to leave more money on the table when universal equality can be achieved than when only partial equality is at stake. Similarly, equality seeking of responders is most prominent when universal equality is possible.

Abstract

In three-person envy games, an allocator, a responder, and a dummy player interact. Since agreement payoffs of responder and dummy are exogenously given, there is no tradeoff between allocator payoff and the payoffs of responder and dummy. Rather, the allocator chooses the size of the pie and thus—being the residual claimant—defines his own payoff. While in the dictator variant of the envy game, responder and dummy can only refuse their own shares, in the ultimatum variant, the responder can accept or reject the allocator’s choice with rejection leading to zero payoffs for all three players. Comparing symmetric and asymmetric agreement payoffs for responder and dummy shows that equality concerns are significantly context-dependent: allocators are willing to leave more money on the table when universal equality can be achieved than when only partial equality is at stake. Similarly, equality seeking of responders is most prominent when universal equality is possible.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Business Administration
Dewey Decimal Classification:330 Economics
Scopus Subject Areas:Social Sciences & Humanities > Applied Psychology
Social Sciences & Humanities > General Social Sciences
Social Sciences & Humanities > Economics and Econometrics
Language:English
Date:1 June 2015
Deposited On:22 Aug 2019 14:16
Last Modified:31 Jul 2020 03:33
Publisher:Elsevier
ISSN:2214-8043
OA Status:Closed
Free access at:Publisher DOI. An embargo period may apply.
Publisher DOI:https://doi.org/10.1016/j.socec.2015.03.004
Other Identification Number:merlin-id:13367

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