CentER

Sabine Kröger

Abstract:
Behavioral Aspects of Bargaining and Pricing is a collection of five studies, which investigate the joint influence of economic institutions and individual preferences on prices and efficiency. The focus of the studies lies on four dimensions or preferences, which are important for economic transactions: fairness considerations, trust propensities, risk attitudes, and time prefenrces. The impact of these preferences is studied in two economically relevant istitutional settings: bargaining and markets. The theoretical analysis of institutions and its implications depend crucially on the assumptions about preferences. Economic experiments thereby help to understand and test in what circumstances certain preferences are influential.

Some remarkable results of the studies in this thesis are that individual behavior seems to be rather well described by theories taking the (im)patience of agents into account. Fairness considerations are found to play an important role not only in bargaining situations but also in competitive markets. At the same time, the impact of fairness varies with the institutional setting. Finally, investigation into the variation of trust accross the Dutch population suggests that age and education affect a basic trust propensity.