Coupled lotteries—A new method to analyze inequality aversion

B-Tier
Journal: Journal of Economic Behavior and Organization
Year: 2021
Volume: 191
Issue: C
Pages: 236-256

Authors (3)

Koch, Melanie (not in RePEc) Menkhoff, Lukas (Humboldt-Universität Berlin) Schmidt, Ulrich (not in RePEc)

Score contribution per author:

0.670 = (α=2.01 / 3 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We develop and implement a new measure for inequality aversion: two peers are endowed with identical binary lotteries and the only choice they make is whether they want to play out the lotteries independently or with perfect positive correlation (coupling). Coupling has the core reason to prevent outcome inequality. We implement the method in a survey in rural Thailand as well as in a supplemental sample in a lab in Germany. In line with previous literature, coupling is related to being more risk averse, to having social status concerns, and to relying more often on formal and informal insurance. However, coupling is not related to giving in the dictator game.

Technical Details

RePEc Handle
repec:eee:jeborg:v:191:y:2021:i:c:p:236-256
Journal Field
Theory
Author Count
3
Added to Database
2026-01-26