Fairness Preferences in a Bilateral Trade Experiment

Alice Ciccone, Ole Rogeberg and Ragnhild Braaten
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Alice Ciccone: Institute of Transport Economics (TØI), Gaustadalléen 21, 0349 Oslo, Norway
Ole Rogeberg: CREE Frisch Centre, Gaustadalléen 21, 0349 Oslo, Norway
Ragnhild Braaten: Oslo Economics, 0349 Oslo, Norway

Games, 2020, vol. 11, issue 1, 1-17

Abstract: Is the willingness to make trades influenced by how the total gains from trade are split between the trading partners? We present results from a bilateral trade game ( n = 128) where all participants were price-takers and trading pairs faced one of three exogenously imposed trading prices. The fixed prices divided the gains either symmetrically in the reference treatment or asymmetrically in treatments favoring either the buyer or seller. Price treatments generating asymmetric gains from trade reduced desired transaction levels on both sides of the market, but more strongly by the disfavored party. The data weakly indicated a larger reduction when the disfavored party was a seller.

Keywords: fairness; inequality aversion; trade; markets; experiment; social preferences (search for similar items in EconPapers)
JEL-codes: C C7 C70 C71 C72 C73 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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