What Can Economists Explain by Taking into Account People's Perceptions of Fairness? Punishing Cheats, Bargaining Impasse, and Self-Perpetuating Inequalities

A standard hypothesis in economics, the rational self-interest hypothesis, is based on a radically simplified view of human nature that says individuals are exclusively motivated by their material self-interest and unboundedly rational in the pursuit of it. Yet experimental evidence overwhelmingly r...

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Bibliographic Details
Main Author:	Hoff, Karla
Language:	English
Published:	Washington, DC: World Bank 2012
Subjects:	World Development Report 2006
Online Access:	http://hdl.handle.net/10986/9251

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spelling	okr-10986-92512021-04-23T14:02:44Z What Can Economists Explain by Taking into Account People's Perceptions of Fairness? Punishing Cheats, Bargaining Impasse, and Self-Perpetuating Inequalities Hoff, Karla World Development Report 2006 A standard hypothesis in economics, the rational self-interest hypothesis, is based on a radically simplified view of human nature that says individuals are exclusively motivated by their material self-interest and unboundedly rational in the pursuit of it. Yet experimental evidence overwhelmingly refutes this hypothesis. Evidence abounds that individuals have preferences for being treated and treating others fairly. These preferences do not affect economic outcomes in competitive markets with standardized products but do affect economic outcomes in a wide variety of other settings where information is imperfect or enforcement is costly. Also discussed are 1) how preferences for fairness can solve a free rider problem, 2) the pitfalls of human concern for fairness, and 3) how extreme inequality can be perpetuated through belief systems that represent oppression as "fair". 2012-06-26T15:42:43Z 2012-06-26T15:42:43Z 2005 http://hdl.handle.net/10986/9251 English CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Washington, DC: World Bank Latin America & Caribbean South Asia
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	World Development Report 2006
spellingShingle	World Development Report 2006 Hoff, Karla What Can Economists Explain by Taking into Account People's Perceptions of Fairness? Punishing Cheats, Bargaining Impasse, and Self-Perpetuating Inequalities
geographic_facet	Latin America & Caribbean South Asia
description	A standard hypothesis in economics, the rational self-interest hypothesis, is based on a radically simplified view of human nature that says individuals are exclusively motivated by their material self-interest and unboundedly rational in the pursuit of it. Yet experimental evidence overwhelmingly refutes this hypothesis. Evidence abounds that individuals have preferences for being treated and treating others fairly. These preferences do not affect economic outcomes in competitive markets with standardized products but do affect economic outcomes in a wide variety of other settings where information is imperfect or enforcement is costly. Also discussed are 1) how preferences for fairness can solve a free rider problem, 2) the pitfalls of human concern for fairness, and 3) how extreme inequality can be perpetuated through belief systems that represent oppression as "fair".
author	Hoff, Karla
author_facet	Hoff, Karla
author_sort	Hoff, Karla
title	What Can Economists Explain by Taking into Account People's Perceptions of Fairness? Punishing Cheats, Bargaining Impasse, and Self-Perpetuating Inequalities
title_short	What Can Economists Explain by Taking into Account People's Perceptions of Fairness? Punishing Cheats, Bargaining Impasse, and Self-Perpetuating Inequalities
title_full	What Can Economists Explain by Taking into Account People's Perceptions of Fairness? Punishing Cheats, Bargaining Impasse, and Self-Perpetuating Inequalities
title_fullStr	What Can Economists Explain by Taking into Account People's Perceptions of Fairness? Punishing Cheats, Bargaining Impasse, and Self-Perpetuating Inequalities
title_full_unstemmed	What Can Economists Explain by Taking into Account People's Perceptions of Fairness? Punishing Cheats, Bargaining Impasse, and Self-Perpetuating Inequalities
title_sort	what can economists explain by taking into account people's perceptions of fairness? punishing cheats, bargaining impasse, and self-perpetuating inequalities
publisher	Washington, DC: World Bank
publishDate	2012
url	http://hdl.handle.net/10986/9251
_version_	1764409034805346304

What Can Economists Explain by Taking into Account People's Perceptions of Fairness? Punishing Cheats, Bargaining Impasse, and Self-Perpetuating Inequalities

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