Working Paper: CEPR ID: DP2984
Authors: Armin Falk; Ernst Fehr; Urs Fischbacher
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 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 behaviour 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 Codes: C78; D63
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| availability of alternative offers (D43) | rejection rates (C52) |
| type of offer (D44) | rejection rates (C52) |
| fairness intentions (D63) | rejection rates (C52) |
| nature of available alternatives (D81) | rejection behavior (D91) |
| perceived fairness (D63) | rejection behavior (D91) |
| offer perceived as unequal (J79) | rejection when alternatives are more equitable (D63) |