Effects of Gain-Loss Frames on Advantageous Inequality Aversion

22 Pages Posted: 4 Dec 2017 Last revised: 27 Sep 2018

See all articles by Kene Boun My

Kene Boun My

University of Strasbourg - Bureau of Economic Theory and Application (BETA); University of Strasbourg

Nicolas Lampach

KU Leuven - Centre for Legal Theory and Empirical Jurisprudence

Mathieu Lefebvre

University of Strasbourg

Jacopo Magnani

EMLYON Business School

Date Written: September 21, 2018

Abstract

This paper studies individuals’ preference for reducing advantageous inequality in the distribution of gains and losses. Combining the inequality aversion model of Fehr and Schmidt (1999) with loss aversion à la Kahneman and Tversky (1979), we predict the relative dislike for advantageous inequality is lower when outcomes are framed as losses than when outcomes are framed as gains. We test this prediction using data from two modified dictator game experiments. Consistent with the model, we find that the amount of payoff that subjects are willing to sacrifice in order to increase the net payoff of others and reduce advantageous inequality is smaller under a loss frame than under a gain frame. The results also show that women are more inequality averse than men in both gains and losses.

Keywords: social preferences, inequality aversion, modified dictator game, loss aversion, laboratory experiment

JEL Classification: C70, C91, D63

Suggested Citation

Boun My, Kene and Lampach, Nicolas and Lefebvre, Mathieu and Magnani, Jacopo, Effects of Gain-Loss Frames on Advantageous Inequality Aversion (September 21, 2018). Available at SSRN: https://ssrn.com/abstract=3079608 or http://dx.doi.org/10.2139/ssrn.3079608

Kene Boun My

University of Strasbourg - Bureau of Economic Theory and Application (BETA) ( email )

France

University of Strasbourg ( email )

61, avenue de la foret noire
4, rue Blaise Pascal
Strasbourg, Alsace 3000
France

Nicolas Lampach (Contact Author)

KU Leuven - Centre for Legal Theory and Empirical Jurisprudence ( email )

Tiensestraat 41
Leuven, B-3000
Belgium

Mathieu Lefebvre

University of Strasbourg

61, avenue de la foret noire
Strasbourg, Alsace 3000
France

Jacopo Magnani

EMLYON Business School

23 Avenue Guy de Collongue
Ecully, 69132
France

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