Envy and Altruism: Contrasting Bivariate and Univariate Prospect Preferences

Guy Kaplanski, Haim Levy

Research output: Contribution to journalArticlepeer-review


We compare prospect ordering with and without envy and altruism. We find that envy can induce a violation of the univariate first-degree stochastic dominance (FSD), and thus a violation of the classic expected utility monotonicity axiom. Surprisingly, altruism can also violate FSD preferences. The intuitive explanation of the result in the case of altruism hinges on the sign of the mixed derivative of the bivariate preference: the individual might prefer a certain correlation between her wealth and her peer group's wealth, and is therefore willing to violate FSD as long as the outcomes of the two parties are ordered according to her preferences. When investments are considered, envy and altruism can distort not only preferences but also actual choices.

Original languageEnglish
Pages (from-to)457-483
Number of pages27
JournalScandinavian Journal of Economics
Issue number2
StatePublished - 1 Apr 2017

Bibliographical note

Publisher Copyright:
© The editors of The Scandinavian Journal of Economics 2015.


  • Efficient set
  • expected money burning
  • social presence
  • stochastic dominance


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