"Pareto Damaging Behaviors"
Publication type: Working paper
Research Archive Topic: Business Economics and Public Policy
This paper reports a rigorous experimental test of Pareto-damaging be- haviors. We introduce a new graphical representation of dictator games with step-shaped sets of feasible payo?s to persons self and other on which strongly Pareto e? cient allocations involve substantial inequality. The non-convexity and sharp nonlinearity of the Pareto frontier allow us systematically to classify Pareto-damaging allocations: as self-damaging or other-damaging and as inequality-increasing or inequality-decreasing. We ?nd that self and other Pareto-damaging behaviors occur frequently even in circumstances that do not implicate reciprocity or strategic inter- action. We also ?nd patterns in this behavior, most notably that behavior that Pareto damages self always reduces inequality whereas behavior that Pareto damages other usually increases inequality.
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