Self-interest and fairness: self-serving choices of justice principles

Abstract

We introduce non-enforceable property rights over a bargaining surplus in a dictator game with production, where the agent's effort is differentially rewarded and subsequently determines the size of the surplus. Using experimental data, we elicit individual preferences over the egalitarian, accountability and libertarian principles and provide evidence to support the inability of these justice principles to individually account for the observed behavior. We show that the justice principle that can be used to explain dictators' choices depends on whether dictators are paid more or less than recipients for their effort. Our findings suggest that dictators do employ justice principles in self-serving ways and choose in each context the justice principle that maximizes their financial payoffs.

Moral Entitlements and Aspiration Formation in Asymmetric Bargaining: Experimental Evidence from Germany and China

“…The range of equity norms in these studies is lower, however, than in our experiment, as these results were derived mostly from behavioral data and not from observational data as in our study. Moreover, the differences in aspiration levels among strong and weak groups fits evidence from previous research on the self-serving use of fairness and social norms (e.g., [21,24,38,73,74]). …”

Fairness in Winner-Take-All Markets.

“…Our study contributes to the literature on what people view as a fair distribution and how fairness considerations shape individual behavior (e.g., Fehr and Schmidt, 1999;Konow, 2000;Cherry, Frykblom, and Shogren, 2002;Falk, Fehr, and Fischbacher, 2003;Tyran and Sausgruber, 2006;Cappelen, Drange Hole, Sørensen, and Tungodden, 2007;Konow, Saijo, and Akai, 2009;Almås, Cappelen, Sørensen, and Tungodden, 2010;Cabrales, Miniaci, Piovesan, and Ponti, 2010;Rodriguez-Lara and Moreno-Garrido, 2012;Cappelen, Moene, Sørensen, and Tungodden, 2013b;Durante, Putterman, and Weele, 2014;Bartling, Weber, and Yao, 2015;Jakiela, 2015). A number of papers both in social psychology and in behavioral economics have shown that a majority of people appear to view income inequalities as fair if the inequalities are proportional to differences in performance (e.g., Adams, 1965;Walster, Berscheid, and Walster, 1973;Leventhal, 1980;Konow, 2000;Frohlich, Oppenheimer, and Kurki, 2004;Cappelen, Sørensen, and Tungodden, 2010;Cappelen et al, 2007Cappelen et al, , 2013a.…”

An experimental study of gender differences in distributive justice

“…The results in Cherry, Frykblom and Shogren (2002) align with the theoretical prediction for selfish dictators that has favored the use of the production stage to elicit fairness attitudes toward redistribution. Some recent studies in this area are by Frohlich, Oppenheimer and Kurki (2004), Cappelen et al (2007), Oxoby and Spraggon (2008) or Rodriguez-Lara and Moreno-Garrido (2012), which argue for the importance of the earned surplus to explain subjects' preferences for fairness, although none of these studies investigate the existence of gender differences in allocation choices. As a result, we lack experimental evidence for how gender interacts with self-interest when dictators have to choose a division of the generated surplus.…”

“…Recent findings in the experimental literature, however, suggest that individuals in a distributional problem such as the dictator game might apply principles of fairness in a self-interested manner (Rutström and Williams 2000;Rodriguez-Lara and Moreno-Garrido 2012). Further experimental evidence suggests that the underlying motivation for much fair behavior might be self-interest, albeit coupled with a desire to maintain the illusion of not being selfish.…”

“…In such a set, the allocations that represent a fairness ideal are the egalitarian, the accountability and the libertarian allocation. The interested reader can see Cappelen et al (2007), Konow (2000), Miller and Ubeda (2011) and Rodriguez-Lara and Moreno-Garrido (2012) for the application and the rationale of these fairness allocations in a "traditional" dictator game in which dictators are allowed to choose any distribution of the surplus. Konow (2003) is an excellent revision of the different fairness ideals.…”