Fairness Preferences in Distributive Bargaining

Abstract:     
In a bargaining situation, the willingness to reveal a preferences for fairness requires, almost by definition, that bargainers be willing to make material sacrifices, and material pursuits may thus override concerns for fairness. This paper presents a bargaining institution that allows for partial disagreement. It will be demonstrated that such a bargaining institution enables a bargainer to reconcile a potential conflict between a preference for fairness and material self-interest.

Number of Pages in PDF File: 52

Keywords: Fairness Preferences, Distributive Bargaining, Contract Formation

JEL Classification: C78, D63, K00

working papers series