Fairness in bargaining

Abstract We consider new three player games to test existing models of fairness. Our games consist of a proposer who offers an allocation of $10 between two players, either himself and the responder or the responder and a third party. In each case, the responder either accepts or rejects this allocation. In case of a rejection, the player who was not part of the initial division (the third party and the proposer, respectively) receives a rejection payoff (of $0, $5 or $10, depending on the game). Our results cast some doubt on existing fairness theories.

[1]  L. Thompson,et al.  Social Utility and Decision Making in Interpersonal Contexts , 1989 .

[2]  W. Nelson.  Equity or intention: it is the thought that counts , 2002 .

[3]  Gary E. Bolton,et al.  A stress test of fairness measures in models of social utility , 2005 .

[4]  Georg Kirchsteiger,et al.  The role of envy in ultimatum games , 1994 .

[5]  M. Rabin,et al.  UNDERSTANDING SOCIAL PREFERENCES WITH SIMPLE TESTS , 2001 .

[6]  J. Kagel,et al.  Tests of Fairness Models Based on Equity Considerations in a Three-Person Ultimatum Game , 2001 .

[7]  U. Fischbacher.  z-Tree: Zurich toolbox for ready-made economic experiments , 1999 .

[8]  Martin Dufwenberg,et al.  A theory of sequential reciprocity , 2004, Games Econ. Behav..

[9]  Armin Falk,et al.  A Theory of Reciprocity , 2001, Games Econ. Behav..

[10]  Gary E. Bolton,et al.  Measuring Motivations for the Reciprocal Responses Observed in a Simple Dilemma Game , 1998 .

[11]  Gary E. Bolton.  A Comparative Model of Bargaining: Theory and Evidence , 1991 .

[12]  W. Güth,et al.  An experimental analysis of ultimatum bargaining , 1982 .

[13]  U. Fischbacher,et al.  On the Nature of Fair Behavior , 1999 .

[14]  A. Roth,et al.  An experimental study of sequential bargaining , 1998 .

[15]  J. Kagel,et al.  Handbook of Experimental Economics , 1997 .

[16]  M. Rabin.  Published by: American , 2022 .

[17]  E. Fehr,et al.  Does Fairness Prevent Market Clearing? An Experimental Investigation , 1993 .

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

[19]  D. Kahneman,et al.  CHAPTER EIGHT. Fairness as a Constraint on Profit Seeking: Entitlements in the Market , 2004 .

[20]  E. Fehr,et al.  Gift Exchange and Reciprocity in Competitive Experimental Markets , 1995 .

[21]  Gary E. Bolton,et al.  ERC: A Theory of Equity, Reciprocity, and Competition , 2000 .

[22]  E. Fehr,et al.  Reciprocity as a contract enforcement device: experimental evidence , 1997 .