COMMENT
Breadcrumb trail navigation:
By Lorenzo Bini Smaghi
Published: March 15 2010 19:38 | Last updated: March 15 2010 19:38
One of the many lessons we can draw from the financial crisis "“ and one supported by the literature on behavioural economics "“ is that economic agents do not always behave rationally, especially when they take decisions affecting others. Research has shown in particular that agents are not only motivated by self-interest, as economists are keen to believe, but also by considerations of fairness.
Various studies have demonstrated that under certain circumstances individuals may even be prepared to renounce additional income if they believe this achieves a more equitable distribution of wealth within the community. For instance, experiments have been conducted, in particular at the universities of Oxford and Warwick, in which participants could pay for the opportunity to "burn" money belonging to other members of the group. Most chose to do so and targeted the richest participants.
You have viewed your allowance of free articles. If you wish to view more, click the button below.
Read Full Article »
