Let the Market Decide: An Experimental Study of Competition and Fairness
Björn Bartling,
Manuel Grieder and
Christian Zehnder
No 4831, CESifo Working Paper Series from CESifo
Abstract:
Is competition perceived as a fair procedure? We report data from laboratory experiments where a powerful buyer can trade with one of several sellers. Sellers who feel shortchanged can engage in counterproductive behavior to punish the buyer. We find that the same unfavorable terms of trade trigger significantly less punishment if the buyer uses a competitive auction to determine the terms of trade than if she uses her authority to dictate the same terms directly. Our results inform the debate on the fairness of market outcomes by showing that the use of a competitive procedure can, by itself, affect how people judge unequal distributive outcomes.
Keywords: competition; authority; markets; fairness; responsibility; procedures (search for similar items in EconPapers)
JEL-codes: C91 D03 D63 (search for similar items in EconPapers)
Date: 2014
References: Add references at CitEc
Citations:
Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp4831.pdf (application/pdf)
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_4831
Access Statistics for this paper
More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe (wohlrabe@ifo.de).