Diskussionspapierreihe // Helmut-Schmidt-Universität, Universität der Bundeswehr Hamburg, Fächergruppe Volkswirtschaftslehre 101
Based on the premise that fairness is different from equity and that it is primarily used in informal contexts we present an economic approach to fairness. Discussing the results of behavioral economics reveals the experience that people do not accept a monetary offer even if that collides with the rationale that more money means higher utility. The economic aspects of fairness are discussed in two ways: first, Varian's idea of envy-free allocations in a general equilibrium context are exposed briefly, and second, we concentrate on the implications of fairness defined via producer and consumer rents. This in-depth exposition focuses on private as well as public goods and concludes with a comparative analysis of fairness in the private and public spheres.