Access
You are not currently logged in.
Access your personal account or get JSTOR access through your library or other institution:
Incorporating Fairness into Game Theory and Economics
Matthew Rabin
The American Economic Review
Vol. 83, No. 5 (Dec., 1993), pp. 1281-1302
Published by: American Economic Association
Stable URL: http://www.jstor.org/stable/2117561
Page Count: 22
- Item Type
- Article
- Thumbnails
- References
Abstract
People like to help those who are helping them, and to hurt those who are hurting them. Outcomes reflecting such motivations are called fairness equilibria. Outcomes are mutual-max when each person maximizes the other's material payoffs, and mutual-min when each person minimizes the other's payoffs. It is shown that every mutual-max or mutual-min Nash equilibrium is a fairness equilibrium. If payoffs are small, fairness equilibria are roughly the set of mutual-max and mutual-min outcomes; if payoffs are large, fairness equilibria are roughly the set of Nash equilibria. Several economic examples are considered, and possible welfare implications of fairness are explored.
Page Thumbnails
-
1281
-
1282
-
1283
-
1284
-
1285
-
1286
-
1287
-
1288
-
1289
-
1290
-
1291
-
1292
-
1293
-
1294
-
1295
-
1296
-
1297
-
1298
-
1299
-
1300
-
1301
-
1302
The American Economic Review © 1993 American Economic Association