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Fairness as a constraint

Jiancai Pi (Department of Economics, School of Economics, Nanjing University, Nanjing, People's Republic of China)

Humanomics

ISSN: 0828-8666

Article publication date: 29 August 2008

438

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

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