Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/102107
Authors: 
Bartling, Björn
Grieder, Manuel
Zehnder, Christian
Year of Publication: 
2014
Series/Report no.: 
CESifo Working Paper 4831
Abstract: 
Is competition perceived as a fair procedure? We report data from laboratory experiments where a powerful buyer can trade with one of several sellers. Sellers who feel shortchanged can engage in counterproductive behavior to punish the buyer. We find that the same unfavorable terms of trade trigger significantly less punishment if the buyer uses a competitive auction to determine the terms of trade than if she uses her authority to dictate the same terms directly. Our results inform the debate on the fairness of market outcomes by showing that the use of a competitive procedure can, by itself, affect how people judge unequal distributive outcomes.
Subjects: 
competition
authority
markets
fairness
responsibility
procedures
JEL: 
C91
D03
D63
Document Type: 
Working Paper

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