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Published December 2013 | Published
Journal Article Open

Social Preferences under Risk: Equality of Opportunity versus Equality of Outcome

Saito, Kota ORCID icon


This paper axiomatizes a utility function for social preferences under risk. In the model, a single parameter captures a preference for equality of opportunity (i.e., equality of exante expected payoffs) relative to equality of outcome (i.e., equality of ex-post payoffs). In a deterministic environment, the model reduces to the model of Fehr and Schmidt (1999). The model is consistent with recent experiments on probabilistic dictator games.

Additional Information

© 2013 American Economic Association. I am indebted to my adviser, Eddie Dekel, for continuous guidance, support, and encouragement. I am grateful to Colin Camerer, Federico Echenique, Jeff Ely, Ernst Fehr, Faruk Gul, Pietro Ortoleva, Marciano Siniscalchi, and Leeat Yariv for discussions that have led to improvement of the paper. I would like to thank my former adviser, Michihiro Kandori, for his guidance when I was at the University of Tokyo. I would also like to thank Elchanan Ben-Porath, Kenneth Binmore, Soo Hong Chew, David Dillenberger, Thibault Gajdos, Itzhak Gilboa, Shachar Kariv, Edi Karni, David Levine, Fabio Maccheroni, Massimo Marinacci, Philippe Mongin, John Roemer, Jacob Sagi, Uzi Segal, and seminar participants at the University of Tokyo, Northwestern University, California Institute of Technology, and Risk, Uncertainty, and Decision (RUD 2010) in Paris. I gratefully acknowledge financial support from the Center for Economic Theory at the Economics Department of Northwestern University. Finally, I appreciate three anonymous referees for their comments. The author has no financial or other material interests related to this research to disclose. This paper was originally circulated as K. Saito (January 25, 2008) "Social Preference under Uncertainty," the University of Tokyo, COE Discussion Papers, No. F-217 (http://www2.e.u-tokyo.ac.jp/cemano/ research/DP/dp.html). The original paper on inequality aversion was first presented on January 16, 2007 at a micro-workshop seminar at the University of Tokyo.

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