by Luciano Andreozzi - Working Paper No. 2019/10

We extend Karni & Safra (2002a) axiomatic model of procedural justice to provide a behavioral characterization of aversion to ex-post inequality. Our characterization distinguishes ex-post inequality aversion from other ’social’ motives like altruism and is independent from attitudes towards risk. It allows for violations of the independence axiom to make room for ex-ante inequality aversion and, more generally, procedural justice. Our axiomatic model naturally lends itself to measure the strength of aversion to ex-post inequality. (JEL: D63, D64, D81)

KeyWords: inequality aversion; risk aversion; altruism; intensity of moral sentiments; procedural justice.