Behavioral Economics Commons^™

Fairness Doesn't Have To Be Egalitarian: Evidence From Bargaining Games, Kevin Wong

Theses and Dissertations

I develop a theoretical model and provide experimental evidence that social norms of fairness play a critical role in determining equilibrium outcomes in bargaining games.

Choices In An Interdependent Economic Environment: Inequity Aversion And Bargaining Games, Andy Galbraith

Economics Theses

Experimental economics has revealed an underlying tension between preferences for fairness and the purely self-interested behavior assumed throughout economic theory. Though many models attempt to explain observed behavior that is inconsistent with theory, the motivations behind such deviations from theoretic equilibrium are still largely unknown.

This paper investigates preferences for fairness in a controlled laboratory setting using an ultimatum game variant. Payoffs to participants are altered over several treatments to examine if subjects exhibit behavior that is consistent with a preference model which incorporates envy and guilt into an individual’s utility function. The results indicate evidence of both guilt and …

Incorporating Fairness Motives Into The Impulse Balance Equilibrium And Quantal Response Equilibrium Concepts: An Application To 2x2 Games, Alessandro Tavoni

Alessandro Tavoni

Substantial evidence has accumulated in recent empirical works on the limited ability of the Nash equilibrium to rationalize observed behavior in many classes of games played by experimental subjects. This realization has led to several attempts aimed at finding tractable equilibrium concepts which perform better empirically; one such example is the impulse balance equilibrium (Selten, Chmura, 2008), which introduces a psychological reference point to which players compare the available payoff allocations. This paper is concerned with advancing two new, empirically sound, concepts: equity-driven impulse balance equilibrium (EIBE) and equity-driven quantal response equilibrium (EQRE): both introduce a distributive reference point to …