Inequality Aversion and Stochastic Decision-making: Experimental Evidence from Zimbabwean Villages after Land Reform
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GPRG Working Paper; 2006/61
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KOHLER, Stefan, Inequality Aversion and Stochastic Decision-making: Experimental Evidence from Zimbabwean Villages after Land Reform, GPRG Working Paper, 2006/61 - https://hdl.handle.net/1814/7400
Abstract
Inequality considerations are a motive for making positive offers in the Ultimatum
Game and rejecting small ones, but decision error could have the same effect. I find
evidence for both of these considerations and a different relative importance amongst
Zimbabwean villagers, of whom some resettled after a government organized land reform
during the 1980s. Resettled villagers have higher inequality aversion and lower decision
error than those who live in traditional villages but, after accounting for different levels
of inequality aversion, the difference in decision error between both groups of villagers
s no longer signi cant. There are no gender differences in preferences. The model
estimated was rst used by De Bruyn and Bolton (2004) on a large set of bargaining
data but the best t of 64 percent overall coincidence of observed and predicted behavior
s achieved for a different symmetric speci cation of inequality aversion in the model.
As the use of eld data is a recent development in experimental economics, I reestimate
he model applied to the Zimbabwean data on the laboratory Ultimatum Game data
of Roth et al. (1991) and further eld data from Henrich et al. (2005). Estimates are
compared comprehensively.