Does Impartial Deliberation Breed Fair Behavior?

We experimentally test whether impartial deliberation leads to stronger concern for fairness in bargaining. In the experiment a seller can invest some of his/her time in order to generate potential gains from trade with a buyer. Conditional on investment the seller proposes how to split the gain. The buyer either accepts or rejects the seller’s offer. To vary the degree of impartiality, subjects are assigned to their roles as sellers or buyers either before (the ‘subjective group’) or after (the ‘objective group’) they read the instructions. We find that the relationship between the perceived investment cost and the bargaining proposal is significantly stronger in the objective group. This suggests that sellers in the objective group are more preoccupied with setting a fair price.

[1]  R. G. Cummings,et al.  Are Hypothetical Referenda Incentive Compatible? , 1997, Journal of Political Economy.

[2]  Norman Frohlich,et al.  Choosing Justice: An Experimental Approach to Ethical Theory , 1992 .

[3]  J. Harsanyi.  Cardinal Welfare, Individualistic Ethics, and Interpersonal Comparisons of Utility , 1955 .

[4]  Max H. Bazerman,et al.  Egocentric Interpretations of Fairness in Asymmetric, Environmental Social Dilemmas: Explaining Harvesting Behavior and the Role of Communication , 1996 .

[5]  George Loewenstein,et al.  Self-Serving Assessments of Fairness and Pretrial Bargaining , 1993, The Journal of Legal Studies.

[6]  John C. Harsanyi,et al.  Cardinal Utility in Welfare Economics and in the Theory of Risk-taking , 1953, Journal of Political Economy.

[7]  Simon Gächter,et al.  Moral Property Rights in Bargaining with Infeasible Claims , 2005, Manag. Sci..

[8]  M. Johannesson,et al.  A note on the estimation of the equity-efficiency trade-off for QALYs. , 1996, Journal of health economics.

[9]  Ralph B. D'Agostino,et al.  The Appropriateness of Some Common Procedures for Testing the Equality of Two Independent Binomial Populations , 1988 .

[10]  G. Loewenstein,et al.  Behavioral Law and Economics: Explaining Bargaining Impasse: The Role of Self-serving Biases , 1997 .

[11]  E. Fehr.  A Theory of Fairness, Competition and Cooperation , 1998 .

[12]  Fredrik Carlsson,et al.  Measuring Future Grandparents' Preferences for Equality and Relative Standing , 2002 .

[13]  George Loewenstein,et al.  Biased Judgments of Fairness in Bargaining , 1995 .

[14]  Simon Gächter,et al.  Moral Property Rights in Bargaining , 2002, SSRN Electronic Journal.

[15]  M. Johannesson,et al.  Sunk Costs, Fairness, and Disagreement , 2001 .

[16]  Donald V. Moser,et al.  Fairness in Ultimatum Games with Asymmetric Information and Asymmetric Payoffs , 1996 .

[17]  Colin Camerer.  Behavioral Game Theory , 1990 .

[18]  Ken Binmore,et al.  Game theory and the social contract: volume 1: playing fair , 1994 .

[19]  Colin F. Camerer,et al.  Outside Options and Social Comparison in Three-Player Ultimatum Game Experiments , 1995 .

[20]  Tore Ellingsen,et al.  Sunk costs and fairness in incomplete information bargaining , 2005, Games Econ. Behav..

[21]  A. Roth,et al.  THE ROLE OF INFORMATION IN BARGAINING: AN EXPERIMENTAL STUDY' , 1982 .

[22]  George Loewenstein,et al.  Choosing the Wrong Pond: Social Comparisons in Negotiations That Reflect a Self-Serving Bias , 1996 .

[23]  James Konow,et al.  Fair Shares: Accountability and Cognitive Dissonance in Allocation Decisions , 2000 .

[24]  G. Loewenstein,et al.  Egocentric Interpretations of Fairness and Interpersonal Conflict , 1992 .

[25]  Ken Binmore,et al.  Game theory and the social contract , 1984 .

[26]  W. Vickrey.  Measuring Marginal Utility by Reactions to Risk , 1945 .

[27]  Taylor Francis Online,et al.  The American statistician , 1947 .

[28]  D. Gauthier.  Morals by Agreement , 1987 .