The new issue of AER has a short behavioral econ paper by Bartling, Fehr, Marechal, and Schunk on egalitarian attitudes and competitiveness. German mothers chose between payoffs to themselves and an anonymous other of 10:10 or 10:6, 10:10 or 16:4, 10:10 or 10:18, and 10:10 or 11: 19. 95 of the 118 subjects chose 10:10 in the first two games in which the egalitarian 10:10 choice was the efficient or neutral choice; 88 out of 95 did so in the second two games in which the egalitarian choice was inefficient.
An outline for a model of how having one player who is known to be an egalitarian ("prefer a minimum difference between payoffs") and one player who is known to favor equity ("prefer a maximum difference between payoffs in order to reflect difference in contributions") can contribute to the two players making efficient choices between social processes: 1) assume the payoff differences between the players for the two choices (0 versus 6 in Fehr's first scenario), but not which player will have the higher payoff, are known prospectively; 2) assume the efficient choice is made if it is known; 3) assume if the efficient choice is not known player 1 decides between the choices; 4) assume efficiency is discoverable prospectively only with a costly investment, which has a value for the two players exceeding its cost but is in the interest of neither one to make; and 3) assume the costly investment is rational for player 2 to make if player 2 knows that player 1 will pick the egalitarian choice and if player 2 values equity OR if player 2 knows that player 1 will pick the inegalitarian choice and player 2 values equality.
Given the foregoing conditions, the costly investment to determine which choice is optimal will be made when one player is egalitarian and the other is equity-oriented, but not when they share value-orientations or lack them.
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