Summary.
Current social utility models posit fairness as a motive for certain types of strategic behavior. The models differ, however, with respect to how fairness is measured. Distribution models measure fairness in terms of relative payoff comparisons. Reciprocal-kindness models measure fairness in terms of gifts given and gifts received. Reference points play an important role in both measures, but the reference points in reciprocal-kindness models are conditioned on the actions available to players, whereas those in distributive models are not. Data from an ultimatum game experiment that stress tests the kindness measure is consistent with the distributive measure. Data from an experiment that stress tests the distributive measure is inconsistent with the distributive measure, but moves in the direction opposite that implied by the kindness measure. A measure that combines relative payoff comparisons with a reference point conditioned on feasible actions provides a first approximation to our data.
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Received: 12 August 2002, Revised: 27 November 2003,
JEL Classification Numbers:
C78, C91, D63.
Correspondence to: Axel Ockenfels
Bolton gratefully acknowledges the support of the National Science Foundation. Ockenfels thanks Alvin Roth and the Harvard Business School for their generous hospitality, and the Deutsche Forschungsgemeinschaft for their support through the Emmy Noether-program. Both authors gratefully acknowledge the hospitality of the Making Choices project at the Center for Interdisciplinary Research, University of Bielefeld during the summer of 2000. We also thank an anonymous referee and seminar participants in Bielefeld, Boston, Columbus, Harvard, and Jena for helpful comments.
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Bolton, G.E., Ockenfels, A. A stress test of fairness measures in models of social utility. Economic Theory 25, 957–982 (2005). https://doi.org/10.1007/s00199-003-0459-z
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DOI: https://doi.org/10.1007/s00199-003-0459-z