Inequity aversion

Inequity aversion2018-07-05T15:34:22+00:00

Human resistance to inequitable outcomes is known as ‘inequity aversion’, which occurs when people prefer fairness and resist inequalities. In some instances, inequity aversion is disadvantageous, as people are willing to forego a gain, in order to prevent another person from receiving a superior reward. Inequity aversion has been studied through experimental games, such as dictator, ultimatum, and trust games (Fehr & Schmidt, 1999), and the concept has been applied in business and marketing, including research on customer responses to exclusive price promotions (Barone & Tirthankar, 2010).

Barone, M. J., & Tirthankar, R. (2010). Does exclusivity always pay off? Exclusive price promotions and consumer response. Journal of Marketing, 74(2), 121-132.

Fehr, E., & Schmidt, K. M. (1999). A theory of fairness, competition, and cooperation. The Quarterly Journal of Economics, 114, 817-868.

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