Search results for: Keyword= equality [3]

Forthcoming
How to Protect Entitlements: An Experiment
Journal of Law and Economics
forthcoming
2017
How to Protect Entitlements: An Experiment
2017/05
Max Planck Institute for Research on Collective Goods
Bonn
2017
Abstract
In a full-information, zero transactions costs world, the degree of protection afforded to an entitlement does not affect the likelihood of efficient trade. In reality, imperfect information is often inevitable. Specifically, a party will usually have incomplete information about fairness norms held by the other party – fairness norms that affect the other party’s willingness to pay (WTP) or willingness to accept (WTA). Importantly, these fairness norms may depend on how strongly the entitlement is protected. We experimentally test the effect of the degree of protection on the parties’ WTP and WTA and on the likelihood of efficient trade by varying the legal remedy for infringing upon the owner’s entitlement. We show that our participants can be divided into three groups corresponding to three different fairness norms: negative types whose WTP and WTA are decreasing in the strength of the legal remedy; positive types whose WTP and WTA are increasing in the strength of the legal remedy; and flat types whose WTP and WTA do not depend on the strength of the legal remedy. We find that type is role-dependent, such that a higher WTP and a lower WTA – the combination most conducive to efficient trade – is obtained with a weaker legal remedy.
2015
The willingness to pay for partial vs. universal equality: Insights from three-person envy games
Journal of Behavioral and Experimental Economics
56
55-61
2015
Abstract
In three-person envy games, an allocator, a responder, and a dummy player interact. Since agreement payoffs of responder and dummy are exogenously given, there is no tradeoff between allocator payoff and the payoffs of responder and dummy. Rather, the allocator chooses the size of the pie and thus—being the residual claimant—defines his own payoff. While in the dictator variant of the envy game, responder and dummy can only refuse their own shares, in the ultimatum variant, the responder can accept or reject the allocator’s choice with rejection leading to zero payoffs for all three players. Comparing symmetric and asymmetric agreement payoffs for responder and dummy shows that equality concerns are significantly context-dependent: allocators are willing to leave more money on the table when universal equality can be achieved than when only partial equality is at stake. Similarly, equality seeking of responders is most prominent when universal equality is possible.