Pareto Damaging Behaviors

31 Pages Posted: 24 Jun 2005

See all articles by Raymond J. Fisman

Raymond J. Fisman

National Bureau of Economic Research (NBER); Boston University

Shachar Kariv

University of California, Berkeley - Department of Economics

Daniel Markovits

Yale Law School

Date Written: May 15, 2005

Abstract

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.

JEL Classification: C79, C91, D64

Suggested Citation

Fisman, Raymond and Kariv, Shachar and Markovits, Daniel, Pareto Damaging Behaviors (May 15, 2005). Yale Law & Economics Research Paper No. 313, Available at SSRN: https://ssrn.com/abstract=748404 or http://dx.doi.org/10.2139/ssrn.748404

Raymond Fisman

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Boston University ( email )

595 Commonwealth Avenue
Boston, MA 02215
United States

Shachar Kariv

University of California, Berkeley - Department of Economics ( email )

549 Evans Hall #3880
Berkeley, CA 94720-3880
United States

Daniel Markovits (Contact Author)

Yale Law School ( email )

P.O. Box 208215
New Haven, CT 06520-8215
United States

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