Inequality aversion and externalities

Arbeitspapier

We conduct a general analysis of the effects of inequality aversion on decisions by homogeneous players in static and dynamic games. We distinguish between direct and indirect effects of inequality aversion. Direct effects are present when a player changes his action to affect disutility caused by inequality. Indirect effects occur when the own action is changed to affect other players' actions. We provide necessary and sufficient conditions for the occurrence of either effect. Moreover, we examine the direction of the effects. Whereas indirect effects induce players to internalize externalities they impose on others, direct effects act in the opposite direction.

Object Details

• Language: Deutsch

References and Relationships

• Bibliographic citation: Series: Working Paper Series ; No. IF36V1

Classification and Topics

• Classification: Wirtschaft ; Noncooperative Games ; Externalities ; Equity, Justice, Inequality, and Other Normative Criteria and Measurement
• Subject: inequality aversion ; externalities ; direct effects ; indirect effects

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Gürtler, Marc ; Gürtler, Oliver
• Event: Veröffentlichung
• (who): Technische Universität Braunschweig, Institut für Finanzwirtschaft
• (where): Braunschweig
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/55226
• Last update: 10.03.2025, 11:44 AM CET