• • Fairness
- People take equity into account when making economic decisions
- This can result in actions that do not fit in the framework of the competitive model but are still rational.
- Positive results may be given up if the situations is not fair – but this is subjective and nearly impossible to predict
- Because of this and the fact that preferences are, in fact, not fixed the competitive model is complicate and the results on Pareto-efficiency are not fully understood
- This presents an opportunity for public policy but care should be taken when using preference and fairness problems to justify public policy as many of these issues will touch on moral values and behavioral expectations