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Equity versus Efficiency? Evidence from Three-Person Generosity Experiments

Author

Listed:
  • Werner Güth

    (Strategic Interaction Group, Max Planck Institute of Economics, Kahlaische Straße 10, 07745 Jena, Germany)

  • Kerstin Pull

    (Human Resource Management and Organization, Eberhard Karls Universität Tübingen, Nauklerstraße 47, 72074 Tübingen, Germany)

  • Manfred Stadler

    (Economic Theory, Eberhard Karls Universität Tübingen, Mohlstraße 36, 72074 Tübingen, Germany)

  • Agnes Stribeck

    (Human Resource Management and Organization, Eberhard Karls Universität Tübingen, Nauklerstraße 47, 72074 Tübingen, Germany)

Abstract

In two-person generosity games, the proposer’s agreement payoff is exogenously given, whereas that of the responder is endogenously determined by the proposer’s choice of the pie size. In three-person generosity games, equal agreement payoffs for two of the players are either exogenously excluded or imposed. We predict that the latter crowds out - or at least weakens - efficiency seeking. Our treatments rely on a 2x3 factorial design, differing in whether the responder or the third (dummy) player is the residual claimant and whether the proposer’s agreement payoff is larger, equal, or smaller than the other exogenously given agreement payoff.

Suggested Citation

  • Werner Güth & Kerstin Pull & Manfred Stadler & Agnes Stribeck, 2010. "Equity versus Efficiency? Evidence from Three-Person Generosity Experiments," Games, MDPI, vol. 1(2), pages 1-14, April.
    • Handle: RePEc:gam:jgames:v:1:y:2010:i:2:p:89-102:d:8056
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    Cited by:

    1. Agnes Bäker & Werner Güth & Kerstin Pull & Manfred Stadler, 2012. "On the Context-Dependency of Inequality Aversion - Experimental Evidence and a Stylized Model -," Jena Economics Research Papers 2012-023, Friedrich-Schiller-University Jena.
    2. Güth, Werner & Kocher, Martin G., 2014. "More than thirty years of ultimatum bargaining experiments: Motives, variations, and a survey of the recent literature," Journal of Economic Behavior & Organization, Elsevier, vol. 108(C), pages 396-409.
    3. Bäker, Agnes & Güth, Werner & Pull, Kerstin & Stadler, Manfred, 2015. "Three-person envy games: Experimental evidence and a stylized model," University of Tübingen Working Papers in Business and Economics 79, University of Tuebingen, Faculty of Economics and Social Sciences, School of Business and Economics.
    4. Yukihiko Funaki & Emmanuel Sol & Marc Willinger, 2021. "Equal division among the few: an experiment about a coalition formation game," CEE-M Working Papers hal-03227388, CEE-M, Universtiy of Montpellier, CNRS, INRA, Montpellier SupAgro.
    5. Bäker, Agnes & Güth, Werner & Pull, Kerstin & Stadler, Manfred, 2015. "The willingness to pay for partial vs. universal equality," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 56(C), pages 55-61.
    6. Karagözoğlu, Emin & Keskin, Kerim & Sağlam, Çağrı, 2013. "A minimally altruistic refinement of Nash equilibrium," Mathematical Social Sciences, Elsevier, vol. 66(3), pages 422-430.
    7. Agathe Rouaix & Charles Figuières & Marc Willinger, 2015. "The trade-off between welfare and equality in a public good experiment," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 45(3), pages 601-623, October.
    8. Werner Güth, 2011. "Bargaining and Negotiations What should experimentalists explore more thoroughly?," Jena Economics Research Papers 2011-012, Friedrich-Schiller-University Jena.
    9. Ingersoll, William Robert & Roomets, Alex, 2020. "Bargaining with a partially-incentivized agent," Journal of Economic Behavior & Organization, Elsevier, vol. 171(C), pages 96-115.
    10. Adam Ayaita & Kerstin Pull, 2022. "Positional preferences and narcissism: evidence from ‘money burning’ dictator games," Applied Economics Letters, Taylor & Francis Journals, vol. 29(3), pages 267-271, February.
    11. Werner Güth & M. Levati & Matteo Ploner, 2012. "An experimental study of the generosity game," Theory and Decision, Springer, vol. 72(1), pages 51-63, January.
    12. Agnes Bäker & Werner Güth & Kerstin Pull & Manfred Stadler, 2014. "Entitlement and the efficiency-equality trade-off: an experimental study," Theory and Decision, Springer, vol. 76(2), pages 225-240, February.

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    Keywords

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    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D3 - Microeconomics - - Distribution

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