Inequity Aversion

Definition 1

Social approbation against participating in decisions that result in unequal distributions of wealth, value or prestige.

Source: Behavioral Science Lab, 2017

Definition 2

Human resistance to inequitable outcomes is known as ‘inequity aversion’, which occurs when people prefer fairness and resist inequalities (Fehr & Schmidt, 1999). 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, particularly dictator, ultimatum, and trust games. The concept has been applied in various domains, including business and marketing, such as research on customer responses to exclusive price promotions (Barone & Tirthankar, 2010) ) and “pay what you want” pricing (e.g. Regner, 2015).

Source: Behavioral Economics