skip to main content
Show Results with:

Distributional Preferences, Reciprocity-Like Behavior, and Efficiency in Bilateral Exchange.

American economic journal. Microeconomics, 2015, Vol.7(1), pp.70-98 [Peer Reviewed Journal]

No full-text

View all versions
  • Title:
    Distributional Preferences, Reciprocity-Like Behavior, and Efficiency in Bilateral Exchange.
  • Author: Benjamin, Daniel J
  • Contributor: Benjamin, Daniel J (correspondence author) ; Benjamin, Daniel J (record owner)
  • Found In: American economic journal. Microeconomics, 2015, Vol.7(1), pp.70-98 [Peer Reviewed Journal]
  • Subjects: Altruism ; Distributional Preferences ; Fairness ; Gift Exchange ; Rotten Kid Theorem
  • Language: English
  • Description: Under what conditions do distributional preferences, such as altruism or a concern for fair outcomes, generate efficient trade? I analyze theoretically a simple bilateral exchange game: each player sequentially takes an action that reduces his own material payoff but increases the other player's. Each player's preferences may depend on both his/her own material payoff and the other player's. I identify two key properties of the second-mover's preferences: indifference curves kinked around "fair" material-payoff distributions, and materials payoffs entering preferences as "normal goods." Either property can drive reciprocity-like behavior and generate a Pareto efficient outcome.
  • Identifier: ISSN: 1945-7669

Searching Remote Databases, Please Wait