Fairness, Price Stickiness, and History Dependence in Decentralized Trade

Autor: Stefan Napel, Christian Korth
Rok vydání: 2009
Předmět:
National Economy
Organizational Behavior and Human Resource Management
Economics and Econometrics
Matching (statistics)
Volkswirtschaftstheorie
Economics
jel:D63
Mid price
jel:D49
Social preferences
Random matching
Price stickiness
History dependence
Reference dependence
Microeconomics
Individualism
Willingness to pay
ddc:330
Cognitive dissonance
random matching
price stickiness
social preferences
history dependence
reference dependence
Social sciences
sociology
anthropology
C78
C91
D49
D63
Random matching
Price stickiness
Social preferences
History dependence
Reference dependence
Erhebungstechniken und Analysetechniken der Sozialwissenschaften
Sozialwissenschaften
Soziologie
jel:C91
jel:C78
Wirtschaft
TheoryofComputation_GENERAL
Methods and Techniques of Data Collection and Data Analysis
Statistical Methods
Computer Methods
Reservation price
ddc:300
Limit price
Zdroj: Journal of Economic Behavior & Organization
Popis: This chapter investigates the implications that social preferences have for the stationary strategic equilibrium of such a decentralized market. Agents are supposed to be averse to unfairly unfavorable as well as unfairly favorable deals in the spirit of Fehr and Schmidt (1999), but we stay rather close to standard individualistic preferences: the negative weights on advantageous and disadvantageous deviations from what is considered as the fair benchmark are such that utility remains strictly increasing in own surplus share. And in contrast to the original Fehr-Schmidt model, the fair split need not automatically be a 50–50 division; any price between sellers’ cost and buyers’ willingness to pay may be the one which—for whatever reasons— is agents’ reference point in a given market. This makes it possible to consider a more flexible notion of fairness than is usually done. It is in line with cognitive dissonance theory from psychology and the noteworthy experiments of Binmore et al. (1991; 1993), where subjects who were triggered to play different bargaining equilibria ended up considering very different surplus distributions as “fair.”
Databáze: OpenAIRE
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