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Fairness Preferences in a Bilateral Trade Experiment

Author

Listed:
  • Alice Ciccone

    (Institute of Transport Economics (TØI), Gaustadalléen 21, 0349 Oslo, Norway
    CREE Frisch Centre, Gaustadalléen 21, 0349 Oslo, Norway)

  • Ole Rogeberg

    (CREE Frisch Centre, Gaustadalléen 21, 0349 Oslo, Norway
    Ragnar Frisch Centre for Economic Research, Gaustadalléen 21, 0349 Oslo, Norway)

  • Ragnhild Braaten

    (Oslo Economics, 0349 Oslo, Norway)

Abstract

Is the willingness to make trades influenced by how the total gains from trade are split between the trading partners? We present results from a bilateral trade game ( n = 128) where all participants were price-takers and trading pairs faced one of three exogenously imposed trading prices. The fixed prices divided the gains either symmetrically in the reference treatment or asymmetrically in treatments favoring either the buyer or seller. Price treatments generating asymmetric gains from trade reduced desired transaction levels on both sides of the market, but more strongly by the disfavored party. The data weakly indicated a larger reduction when the disfavored party was a seller.

Suggested Citation

  • Alice Ciccone & Ole Rogeberg & Ragnhild Braaten, 2020. "Fairness Preferences in a Bilateral Trade Experiment," Games, MDPI, vol. 11(1), pages 1-17, January.
    • Handle: RePEc:gam:jgames:v:11:y:2020:i:1:p:8-:d:314776
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    References listed on IDEAS

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    Cited by:

    1. Karen Evelyn Hauge & Snorre Kverndokk & Andreas Lange, 2021. "Why People Oppose Trade Institutions - On Morality, Fairness and Risky Actions," CESifo Working Paper Series 9456, CESifo.

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