This is Fehr and Schmidt (1999)’s inequality aversion model (I really should install LaTeX):

alpha represents the coefficient of envy, and beta represents the coefficient of guilt.

Now this model assumes that one is indifferent towards people who have the same payoff as one. Why am I bringing this up? I dunno, actually. I’ve been doing some experiments myself and frankly, I don’t give two fraks to what other people’s payoff are, except when they have the same payoff as I do. Even so, I still attempt to maximize my utility. I don’t see a need to penalize those I am envious of, and neither do I see a need to reward those I am guilty of.

Do you feel guilty, let’s say, when playing a Dictator game, that you do not give the responders money? How fair are you in real life? What about in an ultimatum game? How about when you’re envious – will you penalize more? Or am I the odd one out?

Short post today, because I did something only Chewxy can do: this, except its no dream.

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