Fairness in Sharing Gains and Losses



I will present results from experimental economics "dictator" and "ultimatum" games where participants bargain over the sharing of a loss (which we contrast with equivalent games where a gain is being shared). While the results lead to fair split in many case, we also observe patterns of selfishness when gains are being shared, and generosity when losses are being shared. The results lead to a discussion of the theoretical frameworks that might be (in) compatible with the data, with an emphasis on concepts from prospect theory. Implications for marketing are also discussed.
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Dr. G. Liberali