When fairness neither satisfies nor motivates: The role of risk aversion and uncertainty reduction in attenuating and reversing the fair process effect

2011 ◽  
Vol 116 (1) ◽  
pp. 32-45 ◽  
Author(s):  
Sreedhari D. Desai ◽  
Harris Sondak ◽  
Kristina A. Diekmann
Keyword(s):  
Risk Aversion ◽  
Uncertainty Reduction ◽  
Fair Process ◽  
Fair Process Effect

scholarly journals Welfare Consequences of Information Aggregation and Optimal Market Size

2017 ◽  
Vol 9 (4) ◽  
pp. 303-323 ◽  
Author(s):  
Kei Kawakami
Keyword(s):  
Asymmetric Information ◽  
Risk Aversion ◽  
Risk Sharing ◽  
Information Aggregation ◽  
Market Size ◽  
Positive Externality ◽  
Trading Model ◽  
Welfare Implications ◽  
The Right

We analyze the welfare implications of information aggregation in a trading model where traders have both idiosyncratic endowment risk and asymmetric information about security payoffs. The optimal market size balances two forces: (i) the risk-sharing role of markets, which creates a positive externality amongst traders, against (ii) the information-aggregation role of prices, which leads to prices that are more correlated with security payoffs, thereby undermining the hedging function of markets. Our analysis indicates that a market with infinitely many traders may not be the right welfare benchmark in the presence of risk aversion and information aggregation. (JEL D43, D62, D82, D83)

How do I judge my outcome when I do not know the outcome of others? The psychology of the fair process effect.

1997 ◽  
Vol 72 (5) ◽  
pp. 1034-1046 ◽  
Author(s):  
Kees van den Bos ◽  
E. Allan Lind ◽  
Riël Vermunt ◽  
Henk A. M. Wilke
Keyword(s):  
Fair Process ◽  
Fair Process Effect
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