The rise of populism in a number of countries is one of the most visible signs of the weakening of enthusiasm for trade liberalization and market competition. Market competition is increasingly denounced as leading to unfair results by those who lose jobs, and in some cases risk losing their...

This paper analyzes fairness and bargaining in a dynamic bilateral matching market. Traders from both sides of the market are pairwise matched to share the gains from trade. The bargaining outcome depends on the traders’ fairness attitudes. In equilibrium fairness matters because of market...

This paper analyzes fairness and bargaining in a dynamic bilateral matching market. Traders from both sides of the market are pairwise matched to share the gains from trade. The bargaining outcome depends on the traders’ fairness attitudes. In equilibrium fairness matters because of market...

This paper studies how a firm should make pricing and transparency decisions when consumers care about supply chain characteristics. We first show how preferences that account for price and unit cost constrain the firm's pricing power and profit. Surprisingly, we find that the firm may be forced...

We present a framework that incorporates both moral motivations and fairness considerations into utility. The main idea is that individuals face a preference trade-off between their material individual interest and their desire to follow moral norms. In our model, we assume that moral motivation...

As technology-assisted decision-making is becoming more widespread, it is important to understand how the algorithmic nature of the decisionmaker affects how decisions are perceived by the affected people. We use a laboratory experiment to study the preference for human or algorithmic decision...

We report on several experiments on the optimal allocation of ownership rights. The experiments confirm the property rights approach by showing that the ownership structure affects relationship-specific investments and that subjects attain the most efficient ownership allocation despite starting...

We show experimentally that fairness concerns may have a decisive impact on both the actual and the optimal choice of contracts in a moral hazard context. Explicit incentive contracts that are optimal according to self-interest theory become inferior when some agents value fairness. Conversely,...

We provide evidence that long-term relationships between trading parties emerge endogenously in the absence of third party enforcement of contracts and are associated with a fundamental change in the nature of market interactions. Without third party enforcement, the vast majority of trades are...

Researchers frequently studied the casual relationships of other-regarding preferences by applying experimental methods in bilateral settings (e.g., dictator game and ultimatum game). We use a framed experiment on taxes to study preferences for redistribution in a multi-person setting. We find...