Publication at Faculty of Social Sciences, Faculty of Mathematics and Physics, Centre for Economic Research and Graduate Education |
2003
Abstract
Recent theories of fairness (e.g., Bolton & Ockenfels, 2000; Fehr & Schmidt, 1999) have typically used the assumption of ex ante known pie size. Here I explore theoretically the ramifications of pie size being unknown ex ante.
Using a simple allocation problem known as dictator game, I find that attitude to fairness is systematically and intuitively related to risk and risk attitude. Results from informal experiments support the model proposed here.