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How exposure to markets can favor inequity-averse preferences


Zubrickas, Robertas (2012). How exposure to markets can favor inequity-averse preferences. Journal of Economic Behavior & Organization, 84(1):174-181.

Abstract

This paper shows how market exposure can support the evolution of non-individualisticpreferences. In a group, one agent is randomly selected to divide an exogenous endowment.Endowment shares are used for either consumption or market exchange with external merchants.As a more equal endowment distribution attenuates the scope of merchants’ price discrimination,we argue that inequity-averse preferences may lead to a higher utility of consumption and sosurvive evolutionary pressures. This effect arises from an opportunity to create and extractinformation rents. We offer a new explanation to the empirical finding that a society's exposure tomarkets has a positive effect on its members’ sociality.

Abstract

This paper shows how market exposure can support the evolution of non-individualisticpreferences. In a group, one agent is randomly selected to divide an exogenous endowment.Endowment shares are used for either consumption or market exchange with external merchants.As a more equal endowment distribution attenuates the scope of merchants’ price discrimination,we argue that inequity-averse preferences may lead to a higher utility of consumption and sosurvive evolutionary pressures. This effect arises from an opportunity to create and extractinformation rents. We offer a new explanation to the empirical finding that a society's exposure tomarkets has a positive effect on its members’ sociality.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
Language:English
Date:September 2012
Deposited On:17 Sep 2012 09:25
Last Modified:20 Sep 2018 03:33
Publisher:Elsevier
ISSN:0167-2681
OA Status:Green
Publisher DOI:https://doi.org/10.1016/j.jebo.2012.07.008
Other Identification Number:merlin-id:7250

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