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http://hdl.handle.net/10419/55226
  
Title:Inequality aversion and externalities PDF Logo
Authors:Gürtler, Marc
Gürtler, Oliver
Issue Date:2011
Series/Report no.:Working papers // Institut für Finanzwirtschaft, Technische Universität Braunschweig IF36V1
Abstract: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.
Subjects:inequality aversion
externalities
direct effects
indirect effects
JEL:C72
D62
D63
Document Type:Working Paper
Appears in Collections:Working Paper Series, Institut für Finanzwirtschaft, TU Braunschweig

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