Fair share and social efficiency: A mechanism in which peers decide on the payoff division

Arbeitspapier

We propose and experimentally test a mechanism for a class of principal-agent problems in which agents can observe each others' efforts. In this mechanism each player costlessly assigns a share of the pie to each of the other players, after observing their contributions, and the final distribution is determined by these assignments. We show that cooperation can be achieved under this simple mechanism and, in a controlled laboratory experiment, we find that players use a proportional rule to reward others in most cases and that the players' contributions improve substantially and almost immediately with 80% of players contributing fully.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CeDEx Discussion Paper Series ; No. 2016-10

Classification and Topics

• Classification: Wirtschaft ; Externalities ; Public Goods ; Game Theory and Bargaining Theory: Other ; Design of Experiments: General ; Equity, Justice, Inequality, and Other Normative Criteria and Measurement
• Subject: mechanism design ; experimental economics ; fairness ; distributive justice

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Dong, Lu ; Falvey, Rod ; Luckraz, Shravan
• Event: Veröffentlichung
• (who): The University of Nottingham, Centre for Decision Research and Experimental Economics (CeDEx)
• (where): Nottingham
• (when): 2016

Further information

• Handle: http://hdl.handle.net/10419/163011
• Last update: 10.03.2025, 11:43 AM CET