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Emotion Expression and Fairness in Economic Exchange

Author

Listed:
  • Erte Xiao

    () (Department of Social and Decision Sciences, Carnegie Mellon University)

  • Daniel Houser

    () (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University)

Abstract

Research in economics and psychology has established that informal sanctions,particularly expressions of negative emotion, can enforce fair economic exchange. However, scholars are only beginning to understand the reasons informal sanctions affect economic outcomes. Here we provide direct empirical evidence that a preference to avoid negative emotion expression plays an important role in promoting fair exchange. We study one-shot Dictator games, where one subject has the right to determine a division of an amount of money between herself and her receiver. In relation to the standard game, there are significantly less profit-maximizing offers when receivers can react to offers with ex post written messages. Our data provide new perspectives on roles communication systems play in promoting economic efficiency in social environments, and support economic theories of decision that incorporate psychological factors such as guilt and self-deception.

Suggested Citation

  • Erte Xiao & Daniel Houser, 2007. "Emotion Expression and Fairness in Economic Exchange," Working Papers 1004, George Mason University, Interdisciplinary Center for Economic Science, revised Nov 2007.
  • Handle: RePEc:gms:wpaper:1004
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    File URL: http://www.gmu.edu/schools/chss/economics/icesworkingpapers.gmu.edu/pdf/1004.pdf
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    References listed on IDEAS

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    1. Marco Battaglini & Rebecca B. Morton & Thomas R. Palfrey, 2010. "The Swing Voter's Curse in the Laboratory," Review of Economic Studies, Oxford University Press, vol. 77(1), pages 61-89.
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    3. Coupe, Tom & Noury, Abdul G., 2004. "Choosing not to choose: on the link between information and abstention," Economics Letters, Elsevier, vol. 84(2), pages 261-265, August.
    4. Daniel Houser & Thomas Stratmann, 2008. "Selling favors in the lab: experiments on campaign finance reform," Public Choice, Springer, vol. 136(1), pages 215-239, July.
    5. Richard J. Cebula, 2007. "Influences on the Voter Participation Rate," American Journal of Economics and Sociology, Wiley Blackwell, vol. 66(2), pages 399-412, April.
    6. David Dreyer Lassen, 2004. "The Effect of Information on Voter Turnout: Evidence from a Natural Experiment," EPRU Working Paper Series 04-03, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
    7. Matthew Gentzkow, 2006. "Television and Voter Turnout," The Quarterly Journal of Economics, Oxford University Press, vol. 121(3), pages 931-972.
    8. Marco Battaglini & Rebecca B. Morton & Thomas R. Palfrey, 2008. "Information Aggregation and Strategic Abstention in Large Laboratory Elections," American Economic Review, American Economic Association, vol. 98(2), pages 194-200, May.
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    Citations

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    Cited by:

    1. Eriksson, Tor & Villeval, Marie Claire, 2012. "Respect and relational contracts," Journal of Economic Behavior & Organization, Elsevier, vol. 81(1), pages 286-298.
    2. Ivo Bischoff & Özcan Ihtiyar, 2015. "Feedback and Emotions in the Trust Game," MAGKS Papers on Economics 201503, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    3. Vollan, Björn, 2011. "The difference between kinship and friendship: (Field-) experimental evidence on trust and punishment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(1), pages 14-25, February.
    4. James Konow & Tatsuyoshi Saijo & Kenju Akai, 2008. "Morals and Mores? Experimental Evidence on Equity and Equality from the US and Japan," Levine's Working Paper Archive 122247000000002055, David K. Levine.
    5. Daniel Houser & Erte Xiao, 2011. "Classification of natural language messages using a coordination game," Experimental Economics, Springer;Economic Science Association, vol. 14(1), pages 1-14, March.
    6. Konow, James, 2010. "Mixed feelings: Theories of and evidence on giving," Journal of Public Economics, Elsevier, vol. 94(3-4), pages 279-297, April.
    7. Bicchieri, Cristina & Erte, Xiao, 2007. "Do the right thing: But only if others do so," MPRA Paper 4609, University Library of Munich, Germany.

    More about this item

    Keywords

    emotions; fairness; ultimatum games;

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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