IDEAS home Printed from https://ideas.repec.org/a/mhr/jinste/urnsici0932-4569(200703)1631_84fcobla_2.0.tx_2-f.html
   My bibliography  Save this article

Fairness Crowded Out by Law: An Experimental Study on Withdrawal Rights

Author

Listed:
  • Georg Borges
  • Bernd Irlenbusch

Abstract

Withdrawal rights protect buyers in distance selling, for example when ordering via the Internet. After introducing such a law in Germany the proportion of returned goods drastically increased although most sellers had already offered a return option before. We experimentally investigate scenarios in which sellers can voluntarily offer a withdrawal right. In a second treatment it is provided by law. We find indications that a voluntary provision is perceived as friendly, so that buyers reciprocate by not exploiting sellers too heavily. A third treatment reveals that small return costs for buyers have only a marginal influence on withdrawal behaviour.

Suggested Citation

  • Georg Borges & Bernd Irlenbusch, 2007. "Fairness Crowded Out by Law: An Experimental Study on Withdrawal Rights," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 163(1), pages 84-101, March.
    • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200703)163:1_84:fcobla_2.0.tx_2-f
    as

    Download full text from publisher

    File URL: https://www.mohrsiebeck.com/en/article/fairness-crowded-out-by-law-an-experimental-study-on-withdrawal-rights-101628093245607780181937
    Download Restriction: Fulltext access is included for subscribers to the printed version.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Ernst Fehr & Simon Gächter, 2000. "Fairness and Retaliation: The Economics of Reciprocity," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 159-181, Summer.
    2. Abbink, Klaus & Irlenbusch, Bernd & Renner, Elke, 2000. "The moonlighting game: An experimental study on reciprocity and retribution," Journal of Economic Behavior & Organization, Elsevier, vol. 42(2), pages 265-277, June.
    3. Michael Kosfeld & Armin Falk, 2006. "The Hidden Costs of Control," American Economic Review, American Economic Association, vol. 96(5), pages 1611-1630, December.
    4. Fahr, Rene & Irlenbusch, Bernd, 2000. "Fairness as a constraint on trust in reciprocity: earned property rights in a reciprocal exchange experiment," Economics Letters, Elsevier, vol. 66(3), pages 275-282, March.
    5. Berg Joyce & Dickhaut John & McCabe Kevin, 1995. "Trust, Reciprocity, and Social History," Games and Economic Behavior, Elsevier, vol. 10(1), pages 122-142, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Samuel Bowles & Sandra Polania-Reyes, 2011. "Economic incentives and social preferences: substitutes or complements?," Department of Economics University of Siena 617, Department of Economics, University of Siena.
    2. Jing Liu & Anthony Meder & Steven T. Schwartz & Richard A. Young, 2022. "Whither the hidden returns to control: A short research paper," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(8), pages 3361-3369, December.
    3. Werner Güth & Georg von Wangenheim, 2007. "Fairness Crowded Out by Law: An Experimental Study on Withdrawal Rights. Comment," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 163(1), pages 102-105, March.
    4. Samuel Bowles & Sandra Polanía Reyes, 2009. "Economic Incentives and Social Preferences: A preference-Based Lucas Critique of Public Policy," UMASS Amherst Economics Working Papers 2009-11, University of Massachusetts Amherst, Department of Economics.
    5. Christoph Engel & Urs Schweizer, 2007. "Editorial Preface," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 163(1), pages 1-4, March.
    6. Christoph Engel, 2018. "Empirical Methods for the Law," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 174(1), pages 5-23, March.
    7. Bettina Rockenbach, 2007. "Fairness Crowded Out by Law: an Experimental Study on Withdrawal Rights. Comment," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 163(1), pages 106-108, March.
    8. Samuel Bowles & Sandra Polania-Reyes, 2012. "Economic Incentives and Social Preferences: Substitutes or Complements?," Journal of Economic Literature, American Economic Association, vol. 50(2), pages 368-425, June.
    9. Bernd Lahno, 2007. "On the Coevolution of Retribution and Trustworthiness: An (Indirect) Evolutionary and Experimental Analysis. Comment," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 163(1), pages 163-166, March.
    10. Ranftl, Simone & Lurger, Brigitta & Brohmer, Hilmar & Athenstaedt, Ursula, 2022. "The Consumer Option Model for Withdrawal Rights in the EU: Analysis of an Alternative Design," American Journal of Trade and Policy, Asian Business Consortium, vol. 9(1), pages 23-42.
    11. J. Luzak, 2014. "To Withdraw Or Not To Withdraw? Evaluation of the Mandatory Right of Withdrawal in Consumer Distance Selling Contracts Taking Into Account Its Behavioural Effects on Consumers," Journal of Consumer Policy, Springer, vol. 37(1), pages 91-111, March.
    12. Christoph Engel & Michael Kurschilgen, 2011. "The Coevolution of Behavior and Normative Expectations. Customary Law in the Lab," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2011_32, Max Planck Institute for Research on Collective Goods.
    13. Christoph Engel & Urs Schweizer, 2012. "Testing Contracts 29th International Seminar on the New Institutional Economics June 15-18, 2011, Krakow, Poland," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 168(1), pages 1-4, March.
    14. Samuel Bowles & Sandra Polanía Reyes, 2009. "Economic Incentives and Social Preferences: A Preference-based Lucas Critique of Public Policy," CESifo Working Paper Series 2734, CESifo.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chaudhuri, Ananish & Sopher, Barry & Strand, Paul, 2002. "Cooperation in social dilemmas, trust and reciprocity," Journal of Economic Psychology, Elsevier, vol. 23(2), pages 231-249, April.
    2. Ernst Fehr & Klaus M. Schmidt, "undated". "Theories of Fairness and Reciprocity - Evidence and Economic Applications," IEW - Working Papers 075, Institute for Empirical Research in Economics - University of Zurich.
    3. Irlenbusch, Bernd & Sliwka, Dirk, 2003. "Transparency and Reciprocal Behavior," IZA Discussion Papers 887, Institute of Labor Economics (IZA).
    4. Sprinkle, Geoffrey B., 2003. "Perspectives on experimental research in managerial accounting," Accounting, Organizations and Society, Elsevier, vol. 28(2-3), pages 287-318.
    5. Charness, Gary & Kuhn, Peter, 2011. "Lab Labor: What Can Labor Economists Learn from the Lab?," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 3, pages 229-330, Elsevier.
    6. James C. Cox & Daniel Friedman & Vjollca Sadiraj, 2008. "Revealed Altruism," Econometrica, Econometric Society, vol. 76(1), pages 31-69, January.
    7. Xiao, Erte & Bicchieri, Cristina, 2010. "When equality trumps reciprocity," Journal of Economic Psychology, Elsevier, vol. 31(3), pages 456-470, June.
    8. Astrid Hopfensitz & Ernesto Reuben, 2009. "The Importance of Emotions for the Effectiveness of Social Punishment," Economic Journal, Royal Economic Society, vol. 119(540), pages 1534-1559, October.
    9. Klaus Abbink & Bernd Irlenbusch & Elke Renner, 2002. "An Experimental Bribery Game," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 18(2), pages 428-454, October.
    10. Simon Gächter & Esther Kaiser & Manfred Königstein, 2024. "Incentive contracts crowd out voluntary cooperation: Evidence from gift-exchange experiments," Discussion Papers 2024-02, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    11. Kritikos, Alexander S. & Tan, Jonathan H. W., 2005. "Indenture as a Commitment Device in Self-Enforced Contracts: An Experimental Test," Discussion Papers 241, European University Viadrina Frankfurt (Oder), Department of Business Administration and Economics.
    12. Whitson, Jennifer A. & Wang, Cynthia S. & See, Ya Hui Michelle & Baker, Wayne E. & Murnighan, J. Keith, 2015. "How, when, and why recipients and observers reward good deeds and punish bad deeds," Organizational Behavior and Human Decision Processes, Elsevier, vol. 128(C), pages 84-95.
    13. Fehr, Ernst & Schmidt, Klaus M., 2005. "The Economics of Fairness, Reciprocity and Altruism – Experimental Evidence and New Theories," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 66, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    14. Jared Rubin & Roman Sheremeta, 2016. "Principal–Agent Settings with Random Shocks," Management Science, INFORMS, vol. 62(4), pages 985-999, April.
    15. Shchetinin, Oleg, 2009. "Contracting under Reciprocal Altruism," TSE Working Papers 09-078, Toulouse School of Economics (TSE).
    16. Irlenbusch, Bernd & Sliwka, Dirk, 2006. "Career concerns in a simple experimental labour market," European Economic Review, Elsevier, vol. 50(1), pages 147-170, January.
    17. Bergh, Andreas, 2008. "A critical note on the theory of inequity aversion," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(5), pages 1789-1796, October.
    18. Jing Liu & Anthony Meder & Steven T. Schwartz & Richard A. Young, 2022. "Whither the hidden returns to control: A short research paper," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(8), pages 3361-3369, December.
    19. Brülhart, Marius & Usunier, Jean-Claude, 2004. "Verified Trust: Reciprocity, Altruism and Noise in Trust Games," CEPR Discussion Papers 4758, C.E.P.R. Discussion Papers.
    20. Greiff Matthias & Egbert Henrik, 2017. "The Pay-What-You-Want game: What can be learned from the experimental evidence on Dictator and Trust Games?," Management & Marketing, Sciendo, vol. 12(1), pages 124-139, March.

    More about this item

    JEL classification:

    • K12 - Law and Economics - - Basic Areas of Law - - - Contract Law
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mhr:jinste:urn:sici:0932-4569(200703)163:1_84:fcobla_2.0.tx_2-f. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Thomas Wolpert (email available below). General contact details of provider: https://www.mohrsiebeck.com/jite .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.