Unit 5 Who gets what and why?

Question 1

Structural power

Answer 1

• based on value of someone’s next best alternative
• means someone can walk away from a bad deal
• ltd by structural power of the other person

Question 2

Bargaining power

Answer 2

• structural power b/w 2 people determines the greatest and least a person can get from the interaction
• people w bargaining power can set terms of an exchange / impose or threaten to impose heavy costs

Question 3

Substantive judgements of fairness

Answer 3

• only need to look at allocations/payoffs

Question 4

Procedural judgements of fairness

Answer 4

• how the allocations came about (rules, other factors etc)

Question 5

Gini coefficient

Answer 5

measure of inequality

0.5 x avg difference in income / avg income

• closer to 1, more inequality
• closer to zero, less inequality