Mathematics and Economics

(Michael S) #1
Egoism

Simple, yet Famous Models


Other–Regarding Utility functions used to explain experimental data
Fehr–Schmidt (Bolton–Ockenfels) introduce fairness and envy:
Ui=mi−Iα−i 1


kmax{(mk−mi),^0 }−
βi
I− 1


kmax{(mi−mk),^0 }
Charness–Rabin:mi+Iβ−i 1

[


δimin{m 1 ,...,mI}+ (1−δi)

∑I


j=1mj

]


Edgeworth already has looked atmi+mj
Shaked: such ad hoc models are not science (and Poincar ́e would
agree)
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