Theories of Fairness and Reciprocity - Evidence and Economic Applications

Ernst Fehr and Klaus Schmidt ()

No 75, IEW - Working Papers from Institute for Empirical Research in Economics - University of Zurich

Abstract: Most economic models are based on the self-interest hypothesis that assumes that all people are exclusively motivated by their material self-interest. In recent years experimental economists have gathered overwhelming evidence that systematically refutes the self-interest hypothesis and suggests that many people are strongly motivated by concerns for fairness and reciprocity. Moreover, several theoretical papers have been written showing that the observed phenomena can be explained in a rigorous and tractable manner. These theories in turn induced a new wave of experimental research offering additional exciting insights into the nature of preferences and into the relative performance of competing theories of fairness. The purpose of this paper is to review these recent developments, to point out open questions, and to suggest avenues for future research.

Keywords: Behavioral Economics; Fairness; Reciprocity; Altruism; Experiments; Incentives; Contracts; Competition (search for similar items in EconPapers)
JEL-codes: C7 C9 D0 J3 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-hpe and nep-pke
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Citations: View citations in EconPapers (287)

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Related works:
Working Paper: Theories of Fairness and Reciprocity - Evidence and Economic Applications (2001)
Working Paper: Theories of Fairness and Reciprocity – Evidence and Economic Applications (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:zur:iewwpx:075

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