Scandinavian Working Papers in Economics

Working Papers,
Lund University, Department of Economics

No 2004:18: Fairness and Promises for Sale

Håkan Holm () and Anders Daielson
Additional contact information
Håkan Holm: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden
Anders Daielson: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden

Abstract: While many studies have shown that fairness matters few efforts have been made to find out how important fairness is to the individual and thereby assessing the limits of these fairness concerns. This study reports on Trust game experiments in Sweden and Jamaica where subjects could forego a more fair allocation in return for extra money. The results indicate that 90 percent of subjects that had demonstrated fairness ambitions were willing to let down their counterparts if compensated. Explicit promises did not seem to matter. The first player was informed that the second player could earn extra money by changing to an unfair allocation. This modification appeared to make the trust aspect more salient which can explain a relatively strong consistency between trust behavior and answers to attitudinal trust questions.

Keywords: Experiments; trust game; fairness; inequality aversion; opportunism; promise

JEL-codes: C91; D63; D64

54 pages, First version: June 22, 2004. Revised: August 15, 2005.

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WP04_18.pdf PDF-file 

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