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Contribution Details

Type Working Paper
Scope Discipline-based scholarship
Title Market experience is a reference point in judgments of fairness
Organization Unit
  • Holger Herz
  • Dmitry Taubinsky
  • English
Institution University of Zurich
Series Name Working paper series / Department of Economics
Number 128
ISSN 1664-7041
Number of Pages 44
Date 2013
Abstract Text People's desire for fair transactions can play an important role in negotiations, organizations, and markets. In this paper, we show that markets can also shape what people consider to be a fair transaction. We propose a simple and generally-applicable model of path-dependent fairness preferences, in which past experiences shape preferences, and we experimentally test the model's predictions. We find that previous exposure to competitive pressure substantially and persistently reduces subjects' fairness concerns, making them more likely to accept low offers. Consistent with our theory, we also find that past experience has little effect on subjects' inclinations to treat others unfairly.
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Keywords Social preferences, reference points, fairness, bargaining, Fairness, Präferenz, Gerechtigkeitsgefühl, Entscheidungsverhalten, Wettbewerb, Marktform