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Incorporating Fairness into Game Theory and Economics
Open accessAbstract
People like to help those who are helping them and to hurt those who are hurting them. Outcomes rejecting such motivations are called fairness equilibria. Outcomes are mutual-max when each person maximizes the other's material payoffs, and mutual-min when each person minimizes the other's payoffs. It is shown that every mutual-max or mutual-min Nash equilibrium is a fairness equilibrium. If payoffs are small, fairness equilibria are roughly the set of mutual-max and mutual-min outcomes; if payoffs are large, fairness equilibria are roughly the set of Nash equilibria. Several economic examples are considered and possible welfare implications of fairness are explored. Copyright 1993 by American Economic Association.
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Cited by
A Theory of Fairness, Competition, and Cooperation
Fehr, E., & Schmidt, K. M. (1999) · The Quarterly Journal of Economics · doi:10.1162/003355399556151 · Cited by 11,264
Gender Differences in Preferences
Croson, R., & Gneezy, U. (2009) · Journal of Economic Literature · doi:10.1257/jel.47.2.448 · Cited by 5,694
Cooperation and Punishment in Public Goods Experiments
Fehr, E., & Gächter, S. (2000) · American Economic Review · doi:10.1257/aer.90.4.980 · Cited by 4,547
Collective action and the evolution of social norms.
Ostrom, E. (2000) · Journal of Economic Perspectives · doi:10.1257/jep.14.3.137 · Cited by 4,195
Dwork, C., Hardt, M., Pitassi, T., Reingold, O., & Zemel, R. (2012) · Proceedings of the 3rd Innovations in Theoretical Computer Science Conference · doi:10.1145/2090236.2090255 · Cited by 3,501
Metadata
- Authors
- RABIN, M.
- Venue
- Advances in Behavioral Economics
- Publisher
- Princeton University Press
- Published
- 2011-12-12
- Pages
- 297-325
- OpenAlex
- W1599656298
- Cited by
- 4,705
- References
- 0
- FWCI
- 903.93
- Type
- book chapter
- Language
- en
- Open access
- green
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