Fairness has less impact when agents are less informed

Research from the last four decades suggests that fairness plays an important role in economic transactions. However, the vast majority of this research investigates behavior in an environment where agents are fully informed. We develop a new experimental paradigm-nesting the widely used ultimatum game-and find that fairness has less impact on outcomes when agents are less informed. As we remove information, offers become less generous and unfair offers are more likely to be accepted.

Automated summary

Research shows that fairness is important in economic transactions. However, most of the research has focused on fully informed agents. A new experimental paradigm, using the ultimatum game, reveals that fairness has less impact when agents are less informed. With reduced information, offers become less generous and unfair offers are more likely to be accepted.