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Are People Willing to Pay to Reduce Others' Incomes? Author info | Abstract | Publisher info | Download info | Related research | Statistics Zizzo, D.J.
Oswald, A.
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This paper studies utility interdependence in the laboratory. We design an experiment where subjects can reduce ("burn") other subjects' money. Those who burn the money of others have to give up some of their own cash. Despite this cost, and contrary to the assumptions of economics textbooks, the majority of our subjects choose to destroy at least part of others' money holdings. We vary experimentally the amount that subjects have to pay to reduce other people's cash. The implied price elasticity of burning is calculated; it is mostly less than unity. There is a strong correlation between wealth, or rank, and the amounts by which subjects are burnt.
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Paper provided by University of Warwick, Department of Economics in its series The Warwick Economics Research Paper Series (TWERPS) with number
568.
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Length: 38 pages
Date of creation: 2000Date of revision:
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Keywords: INCOME ; MONEY ; PRICES ; Other versions of this item:
Find related papers by JEL classification: C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
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Oswald, Andrew, 1997.
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Fehr, Ernst & Schmidt, Klaus M., 1998.
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Gary E. Bolton & Axel Ockenfels, 2000.
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"More Is Better, But Fair Is Fair: Tipping in Dictator and Ultimatum Games ,"
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Roth, Alvin E. & Vesna Prasnikar & Masahiro Okuno-Fujiwara & Shmuel Zamir, 1991.
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Brockner, Joel & Wiesenfeld, Batia M. & Martin, Christopher L., 1995.
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"Fairness and survival in ultimatum and dictatorship games ,"
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Other versions: Bagwell, Laurie Simon & Bernheim, B Douglas, 1996.
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"Learning in High Stakes Ultimatum Games: An Experiment in the Slovak Republic ,"
Econometrica ,
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"A Tractable Model of Reciprocity and Fairness ,"
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James C. Cox & Daniel Friedman & Steven Gjerstad, 2006.
"A Tractable Model of Reciprocity and Fairness ,"
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2006-05, Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University.
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Games and Economic Behavior ,
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Klaus Abbink & Benedikt Herrmann, 2009.
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Andrew E. Clark & Claudia Senik, 2007.
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