Group fairness equilibria

Abstract

In this paper we extend Rabin’s (1993) model of fairness equilibria to groups of individuals and define a new solution concept we name “group-fairness equilibria.” We model two games with two players, where each player in each game belongs to one of two groups. We analyze how the outcome of one game may affect the outcome of the other and how the existence of one individual with a particular grudge or liking towards the player she is playing with can impact the outcome of both games. We analyze some applications of our model.