Peer-Induced Fairness in Games

Ho, Teck H.; Su, Xuanming

doi:10.1257/aer.99.5.2022

Cited by 211 publications

(117 citation statements)

References 37 publications

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“…Comparing different student populations shows that the longer a student has studied economics the lower are offers in the DG whereas those studying social work maintain relatively high offers in the DG throughout their studies [69]. Manipulating the beliefs what others do can cause large shifts in DG and UG offers and the minimum acceptance level in accordance to what the perceived majority choice in the group is [68], [70], [71]. This suggests that beliefs have an important role in games which are commonly used to assess people's social preferences.…”

Section: Discussion and Concluding Remarksmentioning

confidence: 99%

In Others' Shoes: Do Individual Differences in Empathy and Theory of Mind Shape Social Preferences?

et al. 2014

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Abundant evidence across the behavioral and social sciences suggests that there are substantial individual differences in pro-social behavior. However, little is known about the psychological mechanisms that underlie social preferences. This paper investigates whether empathy and Theory of Mind shape individual differences in pro-social behavior as conventionally observed in neutrally framed social science experiments. Our results show that individual differences in the capacity for empathy do not shape social preferences. The results qualify the role of Theory of Mind in strategic interaction. We do not only show that fair individuals exhibit more accurate beliefs about the behavior of others but that Theory of Mind can be effectively used to pursue both self-interest and pro-social goals depending on the principle objectives of a person.

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Section: Discussion and Concluding Remarksmentioning

confidence: 99%

In Others' Shoes: Do Individual Differences in Empathy and Theory of Mind Shape Social Preferences?

et al. 2014

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“…In particular, we find that online management responses reduce future satisfaction of complaining customers who observe management response to others but do not receive responses themselves. We show the result can be explained by a new type of fairness concern—peer‐induced fairness (Ho and Su )—due to the public nature of online management responses.…”

Section: Introductionmentioning

confidence: 90%

First Step in Social Media: Measuring the Influence of Online Management Responses on Customer Satisfaction

2014

Production and Operations Management

350

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With the growing influence of online social media, firms increasingly take an active role in interacting with consumers in social media. For many firms, their first step in online social media is management responses, where the management responds to customers' comments about the firm or its products and services. In this article, we measure the impact of management responses on customer satisfaction using data retrieved from a major online travel agency in China. Applying a panel data model that controls for regression toward the mean and heterogeneity in individual preference for hotels, we find that online management responses are highly effective among low satisfaction customers but have limited influence on other customers. Moreover, we show that the public nature of online management responses introduces a new dynamic among customers. Although online management responses increase future satisfaction of the complaining customers who receive the responses, they decrease future satisfaction of complaining customers who observe but do not receive management responses. The result is consistent with the peer‐induced fairness theory.

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“…Generally, consumers expect to pay the same price for the same product, and they will treat any price differentials as being entirely unfair (see Ho and Su, 2009). Therefore, although dynamic pricing strategies can boost bottom-lines, there may be associated non-pecuniary costs.…”

Section: Competitive Resale Markets Versus Monopolistic Dynamic Pricingmentioning

confidence: 99%

Optimal Pricing with Speculators and Strategic Consumers

2010

Management Science

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106

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This paper studies a monopolist firm selling a fixed capacity. The firm sets a price before demand uncertainty is resolved. Speculators may enter the market purely with the intention of resale, which can be profitable if demand turns out to be high. Consumers may strategically choose when to purchase, and they may also choose to purchase from the firm or from the speculators. We characterize equilibrium prices and profits and analyze the long-run capacity decisions of the firm. There are three major findings. First, the presence of speculators increases the firm's expected profits even though the resale market competes with the firm. Second, by facilitating resale, the firm can mimic dynamic pricing outcomes and enjoy the associated benefits while charging a fixed price. Third, speculative behavior may generate incentives for the seller to artificially restrict supply, and thus may lead to lower capacity investments. We also explore several model extensions that highlight the robustness of our results.Keywords dynamic pricing, speculation, resale, strategic customer behavior, competition Disciplines Marketing | Sales and MerchandisingThis journal article is available at ScholarlyCommons: http://repository.upenn.edu/oid_papers/165Electronic copy available at: http://ssrn.com/abstract=1441533 Optimal Pricing with Speculators and Strategic Consumers Xuanming SuHaas School of Business, University of California, Berkeley, CA 94720 AbstractThis paper studies a monopolist firm selling a fixed capacity. The firm sets a price before demand uncertainty is resolved. Speculators may enter the market purely with the intention of resale, which can be profitable if demand turns out to be high. Consumers may strategically choose when to purchase, and they may also choose to purchase from the firm or from the speculators. We characterize equilibrium prices and profits and analyze the long run capacity decisions of the firm.There are three major findings. First, the presence of speculators increases the firm's expected profits even though the resale market competes with the firm. Second, by facilitating resale, the firm can mimic dynamic pricing outcomes and enjoy the associated benefits while charging a fixed price. Third, speculative behavior may generate incentives for the seller to artificially restrict supply and thus may lead to lower capacity investments. We also explore several model extensions that highlight the robustness of our results.

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Peer-Induced Fairness in Games

Cited by 211 publications

References 37 publications

In Others' Shoes: Do Individual Differences in Empathy and Theory of Mind Shape Social Preferences?

In Others' Shoes: Do Individual Differences in Empathy and Theory of Mind Shape Social Preferences?

First Step in Social Media: Measuring the Influence of Online Management Responses on Customer Satisfaction

Optimal Pricing with Speculators and Strategic Consumers

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