Envy Freeness in Experimental Fair Division Problems

Dorothea K Herreiner, Economics Department, Loyola Marymount University
Clemens Puppe, Department of Economics, University of Karlsruhe

Abstract:
Envy is sometimes suggested as an underlying motive in the assessment of different economic allocations. In the theoretical literature on fair division, following Foley (1967), the term “envy” refers to an intrapersonal comparison of different consumption bundles. By contrast, in its everyday use “envy” involves interpersonal comparisons of well-being. We present and discuss results from free-form bargaining experiments on fair division problems in which inter- and intrapersonal criteria can be distinguished. We find that interpersonal comparisons play the dominant role. The effect of the intrapersonal criterion of envy-freeness is limited to situations in which other fairness criteria are not applicable.

Keywords: Fairness, Envy Freeness, Social Preferences, Bargaining
JEL Classification: A130, C790, C910, C630

Published: Theory and Decision, 67/1, 2009, 65-100.
DOI: 10.1007/s11238-007-9069-8