The inconsistent evaluation of absolute versus comparative payoffs in labor supply and bargaining

Sally Blount*, Max H. Bazerman

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

46 Scopus citations

Abstract

We demonstrate an inconsistency in how people weight fairness concerns depending upon how preferences for outcomes are elicited. Specifically, we show that people are less concerned with fairness when simultaneously choosing between two outcomes than when considering each outcome separately. For example, in Study 1, subjects were recruited for participation in one of two experiments. One study would pay all participants $7. Another would pay the focal subjects $8, but others $10. When simultaneously choosing between experiments, subjects were more likely to volunteer for the one which paid $8. However, when recruited for only one experiment, those recruited for the $7 one were more likely to volunteer than those recruited to be paid $8 in the $8/ $10 one. In Study 2, subjects playing the chooser role in an ultimatum game were presented with one of two alternative elicitation frames. When asked to consider each possible offer and whether to accept it or reject it and get nothing, subjects' demonstrated a greater willingness to accept unequal payoffs than when asked to state a minimum acceptable payoff. We discuss the possible causes of these inconsistencies and show that similar reversals occur in other choice domains.

Original languageEnglish (US)
Pages (from-to)227-240
Number of pages14
JournalJournal of Economic Behavior and Organization
Volume30
Issue number2
DOIs
StatePublished - Aug 1 1996

Keywords

  • Comparative payoffs
  • Experimental economics
  • Fairness
  • Preference reversal
  • Ultimatum game

ASJC Scopus subject areas

  • Economics and Econometrics
  • Organizational Behavior and Human Resource Management

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