Fairness in Bargaining and Markets
Series: Lecture Notes in Economics and Mathematical Systems ,
Vol. 627 Korth, Christian 2009, XV, 175 p., Softcover ISBN: 978-3-642-02252-4


About this book
This book contributes to behavioral economic research on the central issue of social preferences, focusing on the implications of social fairness norms on the interaction of market participants. The author uses both game-theoretic and experimental methods to analyze the implications of social fairness norms on the outcomes of bilateral bargaining situations. It is shown that a preference for reciprocity is evolutionarily stable in a "game of life" that consists of bilateral bargaining situations. The fairness benchmark or reference that such a preference depends on is investigated through a classroom experiment. Furthermore, the book presents a theoretical analysis of a market model as well as an experimental laboratory study to explore the implications of fairness concerns for price formation in matching markets.

Written for:
Scientists
Keywords:

• Behavioral Economics
• Evolutionary Stability
• Random Matching
• Reciprocity
• Reference Dependence
• Social Preferences

Table of contents
Introduction.- Bargaining Theory.- Game Theory and Fairness Preferences.- Reciprocity - An Indirect Evolutionary Analysis.- Fairness Norms in Ultimatum Exchanges.- Fairness, Price Stickiness, and History Dependence in Decentralized Trade.- Generalizations and Extensions of the Decentralized Trade Model.- Price Rigidity in an Experimental Market