What Makes a Price Fair? An Experimental Study of Transaction Experience and Endogenous Fairness Views
| Autor: | Dmitry Taubinsky, Holger Herz |
|---|---|
| Rok vydání: | 2017 |
| Předmět: |
Salience (language)
media_common.quotation_subject 05 social sciences Endogenous preferences Price discrimination Constraint (information theory) Microeconomics Perception 0502 economics and business Dynamic pricing Market price Economics 050207 economics General Economics Econometrics and Finance Database transaction 050205 econometrics media_common |
| Zdroj: | Journal of the European Economic Association. 16:316-352 |
| ISSN: | 1542-4774 1542-4766 |
| DOI: | 10.1093/jeea/jvx011 |
| Popis: | People's fairness preferences are an important constraint for what constitutes an acceptable economic transaction, yet little is known about how these preferences are formed. In this paper, we provide clean evidence that previous transactions play an important role in shaping perceptions of fairness. Buyers used to high market prices, for example, are more likely to perceive high prices as fair than buyers used to low market prices. Similarly, employees used to high wages are more likely to perceive low wages as unfair. Our data further allows us to decompose this history-dependence into the effects of pure observation versus the experience of payoff-relevant outcomes. We propose two classes of models of path-dependent fairness preferences—either based on endogenous fairness reference points or based on shifts in salience—that can account for our data. Structural estimates of both types of models imply a substantial deviation from existing history-independent models of fairness. Our results have implications for price discrimination, labor markets, and dynamic pricing. (JEL: C9, D0, J0, L1) |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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