Distributive and reciprocal fairness: What can we learn from the heterogeneity of social preferences?

This study evaluates people’s concerns for distributive fairness (equality of outcomes and payoffs to those worse-off) and reciprocal fairness (receiving what one is due based on one’s past actions) using dictator, ultimatum, and trust games. In the dictator games we classify individuals’ preferences as self-interested, inequity averse, efficiency maximizing, or compassionate social surplus maximizing. We find that the different utility functions of the social preference types guide participants’ behavior in the ultimatum and trust games. The self-interested and efficiency maximizers make the lowest offers in the ultimatum game, are least likely to reject a low offer in the ultimatum game, and send back the least amount in the trust game. Consistent with the goal of maximizing the sum of payoffs however, efficiency maximizers and compassionate social surplus maximizers make the highest offers in the trust game, and in attempts to ensure equal outcomes, inequity averters make low offers. Because those classified as self-interested or efficiency maximizing do not exhibit concern for pure distributive fairness, we identify positive offers as first movers in both games as evidence of expectations of reciprocity by second movers and some choices as second movers as clear evidence of their own concerns for reciprocal fairness. Furthermore, we find strong evidence supporting general concern for reciprocal fairness in the trust games where the modal response of second movers in all preference groups is to equalize payments across participants.