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Perceptions of Fairness and Allocation Systems

Author

Listed:
  • David A. Savage

    (The School of Economics and Finance, Queensland University of Technology, GPO Box 2434, Brisbane, QLD 4001, Australia)

  • Benno Torgler

    (The School of Economics and Finance, Queensland University of Technology, GPO Box 2434, Brisbane, QLD 4001, Australia)

Abstract

This paper explores the conditions of acceptability of differing allocation systems under scarcity and evaluates what makes a price system more or less fair. We find that fairness in an allocation arrangement depend on the institutional settings inherent in the situation, such as information, transparency and competition and the perceived institutional quality (e.g., fiscal exchange and institutional trust). Results also indicate that the solution “weak people first” is seen as the fairest approach to an excess demand situation, followed by “first come, first serve”, the price system and an auction system. On the other hand, a random procedure or an allocation through the government is not perceived to be fair. Moreover, economics students seemed to be less sceptical towards the price system than other subjects although we observe that female students are more sceptical than male students.

Suggested Citation

  • David A. Savage & Benno Torgler, 2010. "Perceptions of Fairness and Allocation Systems," Economic Analysis and Policy, Elsevier, vol. 40(2), pages 229-248, September.
    • Handle: RePEc:eee:ecanpo:v:40:y:2010:i:2:p:229-248
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    Citations

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    Cited by:

    1. Bruno S. Frey & David A. Savage & Benno Torgler, 2011. "Behavior under Extreme Conditions: The Titanic Disaster," Journal of Economic Perspectives, American Economic Association, vol. 25(1), pages 209-222, Winter.
    2. David A Savage, 2016. "Those left behind: Euthanasia, suicide and other regarding preferences," Rationality and Society, , vol. 28(4), pages 439-452, November.
    3. Camilleri, Adrian R. & Dankova, Katarina & Ortiz, Jose M. & Neelim, Ananta, 2023. "Increasing worker motivation using a reward scheme with probabilistic elements," Organizational Behavior and Human Decision Processes, Elsevier, vol. 177(C).
    4. Cary Deck & Erik O Kimbrough & Steeve Mongrain, 2014. "Paying for Express Checkout: Competition and Price Discrimination in Multi-Server Queuing Systems," PLOS ONE, Public Library of Science, vol. 9(3), pages 1-13, March.

    More about this item

    Keywords

    Fairness; Allocation System; Excess Demand; Price System; Institutions;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • C99 - Mathematical and Quantitative Methods - - Design of Experiments - - - Other
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values

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