The economics of envy

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Abstract

Equity theory in psychology, observed responses to reform in socialist countries, and studies in the field of organizational behaviour all suggests that envy can play an important role in economic behaviour. This paper incorporates envy into the standard economic choice framework. The model provides a natural extension of the theory of equity in psychology. It is used to analyze how agents' innovating, retaliating, sabotaging, and sharing behaviour are jointly determined by legal institutions and agents' propensities for envy. Implications for the economics of organization and the reform of socialist economies are discussed.

Original languageEnglish
Pages (from-to)311-336
Number of pages26
JournalJournal of Economic Behavior and Organization
Volume26
Issue number3
DOIs
Publication statusPublished - 1 Jan 1995

Keywords

  • Envy
  • Innovation
  • Legal institutions
  • Retaliation
  • Sabotage
  • Sharing

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