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Dictator monopolies and essential goods: experimental evidence

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  • Beckman
  • Gregory DeAngelo
  • Smith

Abstract

Monopolists set prices and if the good is unessential this may place the consumer in an uncomfortable position. But if the good is essential the consumer faces a pay-to-live or -die choice. Dictator and ultimatum games are superficially similar in that one game offers the right of refusal, while the other does not. The dictator monopoly is, however, not a game, and behaviour could be radically different in the market environment versus game environment. We recast the dictator game as a dictator monopoly experiment and find that the fairness characteristic of the game evaporates quickly as rounds progress.

Suggested Citation

  • Beckman & Gregory DeAngelo & Smith, 2015. "Dictator monopolies and essential goods: experimental evidence," Applied Economics, Taylor & Francis Journals, vol. 47(59), pages 6461-6478, December.
    • Handle: RePEc:taf:applec:v:47:y:2015:i:59:p:6461-6478
    DOI: 10.1080/00036846.2015.1071478
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    References listed on IDEAS

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