On the Nature of Fair Behavior
15 Pages Posted: 18 Oct 2001
Date Written: September 2001
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 of defining 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 pay-offs. 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 pay-offs are not.
Keywords: Fairness, intentions, models of fairness
JEL Classification: C78, D63
Suggested Citation: Suggested Citation