Stability and explanatory power of inequality aversion : an investigation of the house money effect


Dannenberg, Astrid ; Riechmann, Thomas ; Sturm, Bodo ; Vogt, Carsten


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URL: http://ub-madoc.bib.uni-mannheim.de/2877
URN: urn:nbn:de:bsz:180-madoc-28778
Document Type: Working paper
Year of publication: 2010
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 300 Social sciences, sociology, anthropology
Classification: JEL: H41 C92 C91 ,
Subject headings (SWD): Soziale Ungleichheit , Gerechtigkeit , Präferenzfunktion , Gefangenendilemma
Keywords (English): individual preferences , inequality aversion , experimental economics , prisoner’s dilemma , house money
Abstract: In this paper, we analyse if individual inequality aversion measured with simple experimental games depends on whether the monetary endowment in these games is either a windfall gain (“house money”) or a reward for a certain effort-related performance. Moreover, we analyse whether the way of preference elicitation affects the explanatory power of inequality aversion in social dilemma situations. Our results indicate that individual inequality aversion is not generally robust to the way endowments emerge. Furthermore, the use of money earned by real efforts instead of house money does not improve the generally low predictive power of the inequality aversion model. Hypotheses based on the inequality aversion model lose their predictive power when preferences are elicited with earned money.
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Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.




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Dannenberg, Astrid ; Riechmann, Thomas ; Sturm, Bodo ; Vogt, Carsten (2010) Stability and explanatory power of inequality aversion : an investigation of the house money effect. Open Access [Working paper]
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