ADVANCES IN APPLIED MICROECONOMICS
Dublin Core
Title
ADVANCES IN APPLIED MICROECONOMICS
Subject
Economic
Economic Behavior
Economic Behavior
Description
This chapter investigates the difference between ultimatum games over gains and over losses. Although previous research in decision making has found that individuals treat losses and gains differently, losses have not previously been investigated in strategic situations. In the field, however, the problem of negotiating over losses is as unavoidable and problematic as the problem of negotiating over gains. In addition, data on how we
bargain over losses can shed some theoretical light on fairness preferenc-es. Two experiments use within-subject designs, the first in the U.S. and the second in the U.S., China and Japan. We find that offers and demands are higher in losses than in gains, and that these results hold across the three countries. We adapt Bolton’s (1991) model of fairness to explain the results. Specifically, we extend prospect theory’s loss aversion to
unfairness, suggesting that unfairness in losses looms larger than unfair-ness in gains.
bargain over losses can shed some theoretical light on fairness preferenc-es. Two experiments use within-subject designs, the first in the U.S. and the second in the U.S., China and Japan. We find that offers and demands are higher in losses than in gains, and that these results hold across the three countries. We adapt Bolton’s (1991) model of fairness to explain the results. Specifically, we extend prospect theory’s loss aversion to
unfairness, suggesting that unfairness in losses looms larger than unfair-ness in gains.
Creator
JOHN MORGAN
Source
Elsevier’s Rights Department in Oxford
Publisher
Elsevier
Date
2005
Contributor
Novita
Format
PDF
Language
English
Type
Textbooks
Files
Collection
Citation
JOHN MORGAN, “ADVANCES IN APPLIED MICROECONOMICS,” Portal Ebook UNTAG SURABAYA, accessed March 15, 2025, https://ebook.untag-sby.ac.id/items/show/1001.