Template-Type: ReDIF-Paper 1.0
Title: Equitable Allocations in Experimental Bargaining Games: Inequality Aversion versus Efficiency
Author-Name: Dorothea K. Herreiner
Author-Name: Clemens Puppe
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Abstract: In this paper, we report on a series of free-form bargaining experiments in which two 
	players have to distribute four indivisible goods among themselves. In one treatment the 
	monetary payoffs associated with each bundle of goods are common knowledge; in a second 
	treatment only the ordinal ranking of the bundles is given. We find that in both cases, 
	the following qualitative rule yields a good explanation of individual behavior: First 
	determine the most equal distribution, then find a Pareto improvement provided that this 
	does not create “too much” inequality. In the ordinal treatment, individuals apparently 
	use the ranks in the respective preference orderings over bundles as a substitute for the 
	unknown monetary value. Interestingly, we find much less Pareto-damaging behavior due to 
	inequality aversion in the ordinal treatment.
Note: 
Length: 27
Creation-Date: 2004-09	
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File-URL: http://www.wiwi.uni-bonn.de/bgsepapers/bonedp/bgse29_2004.pdf
File-Format: application/pdf
Handle: RePEc:bon:bonedp:bgse29_2004