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When is inequality fair? An experiment on the effect of procedural justice and agency

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  • Akbaş, Merve
  • Ariely, Dan
  • Yuksel, Sevgi

Abstract

We investigate how the perceived fairness of an income distribution depends on the beliefs about the process that generates the inequality. Specifically, we examine how two crucial features of this process affect fairness views: (1) Procedural justice - equal treatment of all; (2) Agency – one's ability to determine his/her income. We do this in a lab experiment by differentially varying subjects’ ability to influence their earnings. Comparison of ex-post redistribution decisions of total earnings under different conditions indicate both agency and procedural justice to matter for fairness. Highlighting the importance of agency, we observe lower redistribution of unequal earnings resulting from risk when risk is chosen freely. Highlighting the importance of procedural justice, we find introduction of inequality of opportunity to significantly increase redistribution. Despite this increase, under inequality of opportunity, the share of subjects redistributing none remain close to the share of subjects redistributing fully revealing an underlying heterogeneity in the population about how fairness views should account for inequality of opportunity.

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  • Akbaş, Merve & Ariely, Dan & Yuksel, Sevgi, 2019. "When is inequality fair? An experiment on the effect of procedural justice and agency," Journal of Economic Behavior & Organization, Elsevier, vol. 161(C), pages 114-127.
  • Handle: RePEc:eee:jeborg:v:161:y:2019:i:c:p:114-127
    DOI: 10.1016/j.jebo.2019.02.014
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    5. Schwaiger, Rene & Huber, Jürgen & Kirchler, Michael & Kleinlercher, Daniel & Weitzel, Utz, 2022. "Unequal opportunities, social groups, and redistribution: Evidence from Germany," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 100(C).
    6. Hansson, Kajsa & Persson, Emil & Davidai, Shai & Tinghög, Gustav, 2021. "Losing sense of fairness: How information about a level playing field reduces selfish behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 190(C), pages 66-75.
    7. Bejarano, Hernán & Gillet, Joris & Rodriguez-Lara, Ismael, 2021. "Trust and trustworthiness after negative random shocks," Journal of Economic Psychology, Elsevier, vol. 86(C).
    8. Reindl, Ilona & Tyran, Jean-Robert, 2021. "Equal opportunities for all? How income redistribution promotes support for economic inclusion," Journal of Economic Behavior & Organization, Elsevier, vol. 190(C), pages 390-407.
    9. Tetteh-Baah, Samuel Kofi & Günther, Isabel, 2020. "The impact of gender and ethnic discrimination on redistribution and productivity," VfS Annual Conference 2020 (Virtual Conference): Gender Economics 224633, Verein für Socialpolitik / German Economic Association.
    10. Peter Andre, 2021. "Shallow Meritocracy: An Experiment on Fairness Views," ECONtribute Discussion Papers Series 115, University of Bonn and University of Cologne, Germany.
    11. Abraham Aldama & Cristina Bicchieri & Jana Freundt & Barbara Mellers & Ellen Peters, 2021. "How perceptions of autonomy relate to beliefs about inequality and fairness," PLOS ONE, Public Library of Science, vol. 16(1), pages 1-16, January.
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    13. Bejarano, Hernan & Gillet, Joris & Lara, Ismael Rodríguez, 2021. "When the rich do (not) trust the (newly) rich: Experimental evidence on the effects of positive random shocks in the trust game," OSF Preprints wmejt, Center for Open Science.
    14. W. Robert Knechel & Natalia Mintchik, 2022. "Do Personal Beliefs and Values Affect an Individual’s “Fraud Tolerance”? Evidence from the World Values Survey," Journal of Business Ethics, Springer, vol. 177(2), pages 463-489, May.
    15. Hernan Bejarano & Joris Gillet & Ismael Rodriguez-Lara, 2020. "Trust and Trustworthiness After Negative Random Shocks," Working Papers 20-25, Chapman University, Economic Science Institute.
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    More about this item

    Keywords

    Fairness; Justice; Risk; Inequality; Redistribution; Agency;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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