Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/75882
Authors: 
Fehr, Ernst
Schmidt, Klaus
Year of Publication: 
2000
Series/Report no.: 
CESifo Working Paper 403
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.
Subjects: 
Behavioral economics
fairness
reciprocity
altruism
experiments
incentives
contracts
competition
Document Type: 
Working Paper

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