Emotion Expression and Fairness in Economic Exchange

Erte Xiao () and Daniel Houser ()

No 1003, Working Papers from George Mason University, Interdisciplinary Center for Economic Science

Abstract: Research in economics and psychology has established that informal sanctions,particularly expressions of negative emotion, can enforce fair economic exchange. However, scholars are only beginning to understand the reasons informal sanctions affect economic outcomes. Here we provide direct empirical evidence that a preference to avoid negative emotion expression plays an important role in promoting fair exchange. We study one-shot Dictator games, where one subject has the right to determine a division of an amount of money between herself and her receiver. In relation to the standard game, there are significantly less profit-maximizing offers when receivers can react to offers with ex post written messages. Our data provide new perspectives on roles communication systems play in promoting economic efficiency in social environments, and support economic theories of decision that incorporate psychological factors such as guilt and self-deception.

Keywords: emotions; fairness; ultimatum games (search for similar items in EconPapers)
JEL-codes: C92 D63 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-exp and nep-hpe
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