Does Fairness of the Outside Option Matter?

Maroš Servátka and Radovan Vadovic ()

Working Papers in Economics from University of Canterbury, Department of Economics and Finance

Abstract: Experimental evidence suggests that the size of the foregone outside option does not affect the behavior of the opponent in a lost wallet and pie sharing games but that it matters in a mini-ultimatum game. In this paper we experimentally test a conjecture that it is the fairness property of the outside option which could be responsible for this effect. We compare the behavior of subjects in the lost wallet game when they face a fully unequal (“unfair”) outside option, i.e., the first mover gets 10 and the second mover gets nothing, and when they face an equal (“fair”) outside option, i.e., both get an equal amount of 5. Contrary to our conjecture we do not find a significant difference.

Keywords: Experimental economics; Outside option; Fairness (search for similar items in EconPapers)
JEL-codes: C72 C78 C91 (search for similar items in EconPapers)
Pages: 10 pages
Date: 2008-04-13
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-gth
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:cbt:econwp:08/06

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