This post refers to two Keystone Economic Principles:
1. We all make choices.
4. Economic systems influence choices.
There is a fascinating article in The Atlantic that delves into the idea of fairness in the marketplace.
In economics, we often have opportunities to discuss the idea of "fair exchange". And the idea is central to our idea of how markets work.
Furthermore, in recent years, much has been done in the area of experimental economics with something called "The Ultimatum Game" which is explores how people approach the idea of fairness.
If you're not familiar with the game, it involves two people: a proposer and a responder. The proposer has $10 and must make an offer to the responder on how to split the money. If the responder accepts, they split the money. If the responder rejects, no one gets the money.
Basic economics would suggest that any split should be accepted. After all, anything is better than nothing. But research has shown that if the responder does not view the offer as fair, it gets rejected.
The article goes deeper, exploring the evolution of the idea and the word (relatively recent surprisingly), but it's worth a look. The idea of fairness is an informal institution in our society and, consequently, it affects how we choose. It's something we all might want to understand better.
I look forward to your comments.