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Equity versus Efficiency? Evidence from Three-Person Generosity Experiments
Strategic Interaction Group, Max Planck Institute of Economics, Kahlaische Straße 10, 07745 Jena, Germany
Human Resource Management and Organization, Eberhard Karls Universität Tübingen, Nauklerstraße 47, 72074 Tübingen, Germany
Economic Theory, Eberhard Karls Universität Tübingen, Mohlstraße 36, 72074 Tübingen, Germany
* Author to whom correspondence should be addressed.
Received: 16 March 2010; in revised form: 16 April 2010 / Accepted: 16 April 2010 / Published: 22 April 2010
Abstract: In two-person generosity games, the proposer’s agreement payoff is exogenously given, whereas that of the responder is endogenously determined by the proposer’s choice of the pie size. In three-person generosity games, equal agreement payoffs for two of the players are either exogenously excluded or imposed. We predict that the latter crowds out - or at least weakens - efficiency seeking. Our treatments rely on a 2x3 factorial design, differing in whether the responder or the third (dummy) player is the residual claimant and whether the proposer’s agreement payoff is larger, equal, or smaller than the other exogenously given agreement payoff.
Keywords: generosity game; equity; efficiency; experiment
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Güth, W.; Pull, K.; Stadler, M.; Stribeck, A. Equity versus Efficiency? Evidence from Three-Person Generosity Experiments. Games 2010, 1, 89-102.
Güth W, Pull K, Stadler M, Stribeck A. Equity versus Efficiency? Evidence from Three-Person Generosity Experiments. Games. 2010; 1(2):89-102.
Güth, Werner; Pull, Kerstin; Stadler, Manfred; Stribeck, Agnes. 2010. "Equity versus Efficiency? Evidence from Three-Person Generosity Experiments." Games 1, no. 2: 89-102.