Réttlæti og sérhagsmunir
[Justice and pressure groups]
AbstractThis paper briefly summarizes recent research on justice, in particular Konow’s (2003) positive theory of justice. This research is then applied to recent events in Iceland: the attempt by Iceland’s largest bank to take over a savings bank. Shortly after the deal was announced the Icelandic Parliament quickly and unanimously passed a law which blocked it by creating a hold-up situation for the savings bank board: if it converts the bank to a corporation – as is necessary prior to takeover – an outside board will replace the present board. It is argued that the strong support for the law is puzzling when seen from the perspective of theories of pressure groups, regulatory threat and privatization. However, the paper claims that this may be explained by positive analysis of justice: the board played an ultimatum game against the general public and made what was perceived as an unfair proposal. The proposal was soundly rejected by the public, as usually happens when unfair offers are made in ultimatum games.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 14746.
Date of creation: 2004
Date of revision:
Publication status: Published in Fjármálatíðindi 2.51(2004): pp. 78-86
Positive Justice; Equity; Pressure groups; Regulatory threat; Ultimatum games;
Find related papers by JEL classification:
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
- K10 - Law and Economics - - Basic Areas of Law - - - General (Constitutional Law)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- 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.
- Boycko, Maxim & Shleifer, Andrei & Vishny, Robert W, 1996. "A Theory of Privatisation," Economic Journal, Royal Economic Society, vol. 106(435), pages 309-19, March.
- Glazer, Amihai & McMillan, Henry, 1992. "Pricing by the Firm under Regulatory Threat," The Quarterly Journal of Economics, MIT Press, vol. 107(3), pages 1089-99, August.
- Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard, 1986. "Fairness as a Constraint on Profit Seeking: Entitlements in the Market," American Economic Review, American Economic Association, vol. 76(4), pages 728-41, September.
- Becker, Gary S, 1983. "A Theory of Competition among Pressure Groups for Political Influence," The Quarterly Journal of Economics, MIT Press, vol. 98(3), pages 371-400, August.
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