Fairness as a constraint
Abstract
Purpose
The purpose of this short paper is to provide an alternative method to explain the reason why the outcome of the ultimatum game based on the well‐known self‐interest model is not feasible in real life.
Design/methodology/approach
Contrary to traditional models which treat fairness as a variable of the utility function, the paper takes fairness as a constraint to the utility function. The problem is solved through the standard incentive theory and bargaining theory.
Findings
It was found that fairness constraints play an important role in determining the eventual outcome of the ultimatum game.
Research limitations/implications
The paper's approach may set up a useful framework for incorporating fairness into economics, and bridge the gaps between the fairness approach and the standard incentive theory and bargaining theory.
Practical implications
When tackling the problem of distribution based on fairness, the paper shows that the cultural background and special situation should be taken seriously.
Originality/value
In this paper, the concept of the fairness constraint is introduced into a formal framework.
Keywords
Citation
Pi, J. (2008), "Fairness as a constraint", Humanomics, Vol. 24 No. 3, pp. 239-243. https://doi.org/10.1108/08288660810899386
Publisher
:Emerald Group Publishing Limited
Copyright © 2008, Emerald Group Publishing Limited