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Express Yourself: The Price of Fairness in a Simple Distribution Game

  • Andreas Nicklisch

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    A simple two-person distribution game similar to the ultimatum game is introduced. However, unlike the standard ultimatum game, responders can determine the payoff for the proposer in case of rejection. Therefore, they can express their concerns in monetary quantities. The experimental data are analyzed with respect to inequity aversion and intended punishment. The analysis casts doubt on a single motivation of responders' actions, but supports a combination of reciprocity and inequity aversion. ased on these findings, the data support a simple model for distribution preferences based on an increasing price for exposing responders to unkind offers.

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    File URL: ftp://papers.econ.mpg.de/esi/discussionpapers/2004-36.pdf
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    Paper provided by Max Planck Institute of Economics, Strategic Interaction Group in its series Papers on Strategic Interaction with number 2004-36.

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    Length: 20 pages
    Date of creation: Nov 2004
    Date of revision:
    Handle: RePEc:esi:discus:2004-36
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    1. Rabin, Matthew, 2002. "A Perspective on Psychology and Economics," Department of Economics, Working Paper Series qt2wr3z049, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    2. Falk, Armin & Fischbacher, Urs, 2001. "A Theory of Reciprocity," CEPR Discussion Papers 3014, C.E.P.R. Discussion Papers.
    3. Telser, L G, 1995. "The Ultimatum Game and the Law of Demand," Economic Journal, Royal Economic Society, vol. 105(433), pages 1519-23, November.
    4. Georg Kirchsteiger & Martin Dufwenberg, 2004. "A theory of sequential reciprocity," ULB Institutional Repository 2013/5899, ULB -- Universite Libre de Bruxelles.
    5. Charness, Gary & Rabin, Matthew, 2001. "Understanding Social Preferences with Simple Tests," Department of Economics, Working Paper Series qt4qz9k8vg, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    6. Ernst Fehr & Klaus Schmidt, 2000. "Theories of Fairness and Reciprocity – Evidence and Economic Applications," CESifo Working Paper Series 403, CESifo Group Munich.
    7. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory Of Fairness, Competition, And Cooperation," The Quarterly Journal of Economics, MIT Press, vol. 114(3), pages 817-868, August.
    8. Rami Zwick & Xiao-Ping Chen, 1999. "What Price Fairness? A Bargaining Study," Experimental 9902002, EconWPA.
    9. Falk, Armin & Fehr, Ernst & Fischbacher, Urs, 2001. "On the Nature of Fair Behaviour," CEPR Discussion Papers 2984, C.E.P.R. Discussion Papers.
    10. James Cox & Daniel Friedman & Steven Gjerstad, 2004. "A Tractable Model of Reciprocity and Fairness," Experimental 0406001, EconWPA.
    11. Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March.
    12. Georg Kirchsteiger, 1994. "The role of envy in ultimatum games," ULB Institutional Repository 2013/5925, ULB -- Universite Libre de Bruxelles.
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