Pareto Damaging Behaviors
Raymond J. Fisman
Columbia Business School - Finance and Economics; National Bureau of Economic Research (NBER)
University of California, Berkeley - Department of Economics
Yale Law School
May 15, 2005
Yale Law & Economics Research Paper No. 313
This paper reports a rigorous experimental test of Pareto-damaging behaviors. We introduce a new graphical representation of dictator games with step-shaped sets of feasible payoffs to persons self and other on which strongly Pareto efficient allocations involve substantial inequality. The non-convexity and sharp nonlinearity of the Pareto frontier allow us systematically to classify Pareto-damaging allocations: as self-damaging or other-damaging and as inequality-increasing or inequality-decreasing. We find that self and other Pareto-damaging behaviors occur frequently even in circumstances - dictator games - that do not implicate reciprocity or strategic interaction. We also find patterns in this behavior, most notably that behavior that Pareto damages self always reduces inequality whereas behavior that Pareto damages other usually increases inequality.
Number of Pages in PDF File: 31
JEL Classification: C79, C91, D64working papers series
Date posted: June 24, 2005
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