Perceptions of Fairness and Allocation Systems

David Savage and Benno Torgler ()
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Benno Torgler: The School of Economics and Finance, Queensland University of Technology, GPO Box 2434, Brisbane, QLD 4001, Australia

Economic Analysis and Policy, 2010, vol. 40, issue 2, 229-248

Abstract: This paper explores the conditions of acceptability of differing allocation systems under scarcity and evaluates what makes a price system more or less fair. We find that fairness in an allocation arrangement depend on the institutional settings inherent in the situation, such as information, transparency and competition and the perceived institutional quality (e.g., fiscal exchange and institutional trust). Results also indicate that the solution “weak people first” is seen as the fairest approach to an excess demand situation, followed by “first come, first serve”, the price system and an auction system. On the other hand, a random procedure or an allocation through the government is not perceived to be fair. Moreover, economics students seemed to be less sceptical towards the price system than other subjects although we observe that female students are more sceptical than male students.

Keywords: Fairness; Allocation System; Excess Demand; Price System; Institutions (search for similar items in EconPapers)
JEL-codes: A13 C99 D12 D21 D40 D63 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:40:y:2010:i:2:p:229-248

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