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Fairness and Promises for Sale

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  • Holm, Håkan

    ()
    (Department of Economics, Lund University)

  • Daielson, Anders

    (Department of Economics, Lund University)

Abstract

While many studies have shown that fairness matters few efforts have been made to find out how important fairness is to the individual and thereby assessing the limits of these fairness concerns. This study reports on Trust game experiments in Sweden and Jamaica where subjects could forego a more fair allocation in return for extra money. The results indicate that 90 percent of subjects that had demonstrated fairness ambitions were willing to let down their counterparts if compensated. Explicit promises did not seem to matter. The first player was informed that the second player could earn extra money by changing to an unfair allocation. This modification appeared to make the trust aspect more salient which can explain a relatively strong consistency between trust behavior and answers to attitudinal trust questions.

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Bibliographic Info

Paper provided by Lund University, Department of Economics in its series Working Papers with number 2004:18.

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Length: 54 pages
Date of creation: 22 Jun 2004
Date of revision: 15 Aug 2005
Handle: RePEc:hhs:lunewp:2004_018

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Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund,Sweden
Phone: +46 +46 222 0000
Fax: +46 +46 2224613
Web page: http://www.nek.lu.se/en
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Keywords: Experiments; trust game; fairness; inequality aversion; opportunism; promise;

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References

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  1. Dufwenberg, M. & Kirchsteiger, G., 1998. "A Theory of Sequential Reciprocity," Discussion Paper 1998-37, Tilburg University, Center for Economic Research.
  2. Becker, Gary S, 1974. "A Theory of Social Interactions," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1063-93, Nov.-Dec..
  3. James Konow, 2003. "Which Is the Fairest One of All? A Positive Analysis of Justice Theories," Journal of Economic Literature, American Economic Association, vol. 41(4), pages 1188-1239, December.
  4. Ernst Fehr & Klaus M. Schmidt, . "A Theory of Fairness, Competition and Cooperation," IEW - Working Papers 004, Institute for Empirical Research in Economics - University of Zurich.
  5. Holm, Hakan & Nystedt, Paul, 2005. "Intra-generational trust--a semi-experimental study of trust among different generations," Journal of Economic Behavior & Organization, Elsevier, vol. 58(3), pages 403-419, November.
  6. Charness, Gary B & Dufwenberg, Martin, 2006. "Promises & Partnership," University of California at Santa Barbara, Economics Working Paper Series qt0127h86v, Department of Economics, UC Santa Barbara.
  7. Matthew Rabin., 1992. "Incorporating Fairness into Game Theory and Economics," Economics Working Papers 92-199, University of California at Berkeley.
  8. Camerer, Colin F & Hogarth, Robin M, 1999. "The Effects of Financial Incentives in Experiments: A Review and Capital-Labor-Production Framework," Journal of Risk and Uncertainty, Springer, vol. 19(1-3), pages 7-42, December.
  9. Danielson, Anders & Holm, Hakan J, 2003. "Tropic Trust versus Nordic Trust: Experimental Evidence from Tanzania and Sweden," Working Papers 2003:6, Lund University, Department of Economics.
  10. Andreoni, James, 1990. "Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving?," Economic Journal, Royal Economic Society, vol. 100(401), pages 464-77, June.
  11. Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March.
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Cited by:
  1. Holm, Håkan & Nystedt, Paul, 2005. "Trust in surveys and games - a matter of money and location?," Working Papers 2005:26, Lund University, Department of Economics, revised 15 Aug 2005.
  2. Lundquist, Tobias & Ellingsen, Tore & Gribbe, Erik & Johannesson, Magnus, 2009. "The aversion to lying," Journal of Economic Behavior & Organization, Elsevier, vol. 70(1-2), pages 81-92, May.
  3. Robert Jiro Netzer & Matthias Sutter, 2009. "Intercultural trust. An experiment in Austria and Japan," Working Papers 2009-05, Faculty of Economics and Statistics, University of Innsbruck.

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