On the Nature of Fair Behavior

IEER Working Paper No. 17

12 Pages Posted: 11 Jan 2000

See all articles by Armin Falk

Armin Falk

University of Bonn - Economic Science Area; briq - Institute on Behavior & Inequality

Ernst Fehr

University of Zurich - Department of Economics

Urs Fischbacher

University of Konstanz - Faculty of Economics and Statistics

Multiple version iconThere are 3 versions of this paper

Date Written: August 1999

Abstract

This paper shows that identical offers in an ultimatum game generate systematically different rejection rates depending on the other offers that are available to the proposer. This result casts doubt on the consequentialist practice in economics to define the utility of an action solely in terms of the consequences of the action irrespective of the set of alternatives. It means, in particular, that negatively reciprocal behavior cannot be fully captured by equity models that are exclusively based on preferences over the distribution of material payoffs. Models that take into account players' fairness intentions and distributional preferences are consistent with our data while models that focus exclusively on intentions or on the distribution of material payoffs are not.

JEL Classification: C78, C91, D63

Suggested Citation

Falk, Armin and Fehr, Ernst and Fischbacher, Urs, On the Nature of Fair Behavior (August 1999). IEER Working Paper No. 17, Available at SSRN: https://ssrn.com/abstract=203289 or http://dx.doi.org/10.2139/ssrn.203289

Armin Falk (Contact Author)

University of Bonn - Economic Science Area ( email )

briq - Institute on Behavior & Inequality

Schaumburg-Lippe-Stra├če 5-9
Bonn, 53113
Germany

HOME PAGE: http://www.briq-institute.org/

Ernst Fehr

University of Zurich - Department of Economics ( email )

Bl├╝mlisalpstrasse 10
Zuerich, 8006
Switzerland
+41 1 634 3709 (Phone)
+41 1 634 4907 (Fax)

Urs Fischbacher

University of Konstanz - Faculty of Economics and Statistics ( email )

Universitaetsstr. 10
78457 Konstanz
Germany

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