TY - JOUR
T1 - Fair share and social efficiency: A mechanism in which peers decide on the payoff division
AU - Dong, Lu
AU - Falvey, Rod
AU - Luckraz, Shravan
N1 - Funding Information:
We would like to thank Robin Cubbit, Peter DeScioli, Simon Gächter, Lingbo Huang, Aidas Masillunas, Maria Montero, Alex Possajennikov, Jan Potters, Martin Sefton, Brock Stoddard, three anonymous reviewers, and the Advisory Editor for their useful comments and suggestions. The financial supports from the University of Nottingham, Ningbo, China (grants no. 01020404201402003) and National Natural Science Foundation of China (grants no. 71873068) are gratefully acknowledged.
Publisher Copyright:
© 2019 Elsevier Inc.
PY - 2019/5
Y1 - 2019/5
N2 - We propose and experimentally test a mechanism for a class of principal-agent problems in which agents can observe each others' efforts. In this mechanism each player costlessly assigns a share of the pie to each of the other players, after observing their contributions, and the final distribution is determined by these assignments. We show that efficiency can be achieved under this simple mechanism and, in a controlled laboratory experiment, we find that players reward others based on relative contributions in most cases and that the players' contributions improve substantially and almost immediately with 80 percent of players contributing fully.
AB - We propose and experimentally test a mechanism for a class of principal-agent problems in which agents can observe each others' efforts. In this mechanism each player costlessly assigns a share of the pie to each of the other players, after observing their contributions, and the final distribution is determined by these assignments. We show that efficiency can be achieved under this simple mechanism and, in a controlled laboratory experiment, we find that players reward others based on relative contributions in most cases and that the players' contributions improve substantially and almost immediately with 80 percent of players contributing fully.
UR - http://www.scopus.com/inward/record.url?scp=85064005359&partnerID=8YFLogxK
U2 - 10.1016/j.geb.2019.02.016
DO - 10.1016/j.geb.2019.02.016
M3 - Article
AN - SCOPUS:85064005359
SN - 0899-8256
VL - 115
SP - 209
EP - 224
JO - Games and Economic Behavior
JF - Games and Economic Behavior
ER -