EconPapers    
Economics at your fingertips  
 

A Theory of Fairness, Competition, and Cooperation

Ernst Fehr () and Klaus M. Schmidt

The Quarterly Journal of Economics, 1999, vol. 114, issue 3, 817-868

Abstract: There is strong evidence that people exploit their bargaining power in competitive markets but not in bilateral bargaining situations. There is also strong evidence that people exploit free-riding opportunities in voluntary cooperation games. Yet, when they are given the opportunity to punish free riders, stable cooperation is maintained, although punishment is costly for those who punish. This paper asks whether there is a simple common principle that can explain this puzzling evidence. We show that if some people care about equity the puzzles can be resolved. It turns out that the economic environment determines whether the fair types or the selfish types dominate equilibrium behavior.

Date: 1999
References: Add references at CitEc
Citations: View citations in EconPapers (2985) Track citations by RSS feed

Downloads: (external link)
http://hdl.handle.net/10.1162/003355399556151 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: A theory of fairness, competition, and cooperation (1999)
Working Paper: A Theory of Fairness, Competition and Cooperation (1998) Downloads
Chapter: A theory of fairness, competition, and cooperation
Working Paper: A Theory of Fairness, Competition and Cooperation Downloads
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:oup:qjecon:v:114:y:1999:i:3:p:817-868.

Access Statistics for this article

The Quarterly Journal of Economics is currently edited by Robert J. Barro, Elhanan Helpman, Lawrence F. Katz and Andrei Schleifer

More articles in The Quarterly Journal of Economics from Oxford University Press
Bibliographic data for series maintained by Oxford University Press ().

 
Page updated 2019-05-10
Handle: RePEc:oup:qjecon:v:114:y:1999:i:3:p:817-868.