Most research in economics models agents somehow motivated by outcomes. Here, we model agents motivated by procedures instead, where procedures are defined independently of an outcome. To that end, we design procedures which yield the same expected outcomes or carry the same information on...

Intention-based models of reciprocity argue that people assess kindness by measuring the intended consequences of actual behavior (deeds) against foregone payoffs resulting from unchosen alternatives (omissions). While the effects of omissions have been intensively studied in recent years, less...

In many business transactions, in labor-management relations, in internationalconflicts, and welfare state reforms bargainers hold strong entitlements that are oftengenerated by claims that are not feasible any more. These entitlements seem to considerablyshape negotiation behavior. By using the...

Theoretical research on claims problems has concentrated on normative properties and axiomatizations of solution concepts. We complement these analyses by empirical evidence on the predictability of three classical solution concepts in a bankruptcy problem. We examine both people's impartial...

People's desire for fair transactions can play an important role in negotiations, organizations, and markets. In this paper, we show that markets can also shape what people consider to be a fair transaction. We propose a simple and generally-applicable model of path-dependent fairness...

In an incomplete information setting, we analyze the sealed bid auction proposed by Knaster (cf. Steinhaus (1948)). This procedure was designed to efficiently and fairly allocate multiple indivisible items when participants report their valuations truthfully. In equilibrium, players do not...

We experimentally investigate the relevance of (asymmetric) outside options in ultimatum bargaining. Building on the generalized equity principle formulated by Selten (1978) we derive three different equity rules. These equity rules can explain 43% of all o ers. Our within-subject design allows...

People's fairness preferences are an important constraint for what constitutes an acceptable economic transaction, yet little is known about how these preferences are formed. In this paper, we provide clean evidence that contrast effects arising from previous transactions play an important role...

This paper considers the problem of allocating N indivisible objects among N agents according to their preferences when transfers are not allowed, and studies the tradeoff between fairness and efficiency in the class of strategy-proof mechanisms. The main finding is that for strategy-proof...

A central authority designs and implements the college admissions process in Turkey. All applicants are required to take an SAT-like test and submit their preferences over the departments. Then, the central authority places the applicants in departments by considering the test scores and stated...