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A Trackable Model of Reciprocity and Fairness

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  • Cox, J.
  • Friedman, D.
  • Gjerstad, S.

Abstract

We introduced a parametric model of other-regarding preferences in which my emotional state determines the marginal rate of substitution between my own and other' payoffs, and thus my subsequent choices. In turn, my emotional state responds to relative status and to the kindness or unkindness of others' choices. Structural estimations of this model with six existing data sets demonstrate that other-regarding preferences depend on status, reciprocity, and perceived property rights.

Suggested Citation

  • Cox, J. & Friedman, D. & Gjerstad, S., 2006. "A Trackable Model of Reciprocity and Fairness," Purdue University Economics Working Papers 1181, Purdue University, Department of Economics.
    • Handle: RePEc:pur:prukra:1181
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    More about this item

    Keywords

    RECIPROCITY ; MARGINAL RATE OF SUBSTITUTION ; PAYOFFS;
    All these keywords.

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory

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