IDEAS home Printed from https://ideas.repec.org/a/eee/joepsy/v33y2012i3p538-553.html
   My bibliography  Save this article

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

Author

Listed:
  • Kamas, Linda
  • Preston, Anne

Abstract

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.

Suggested Citation

  • Kamas, Linda & Preston, Anne, 2012. "Distributive and reciprocal fairness: What can we learn from the heterogeneity of social preferences?," Journal of Economic Psychology, Elsevier, vol. 33(3), pages 538-553.
  • Handle: RePEc:eee:joepsy:v:33:y:2012:i:3:p:538-553
    DOI: 10.1016/j.joep.2011.12.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0167487011001772
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Gary Charness & Matthew Rabin, 2002. "Understanding Social Preferences with Simple Tests," The Quarterly Journal of Economics, Oxford University Press, vol. 117(3), pages 817-869.
    2. Brandts, Jordi & Sola, Carles, 2001. "Reference Points and Negative Reciprocity in Simple Sequential Games," Games and Economic Behavior, Elsevier, vol. 36(2), pages 138-157, August.
    3. Gary Charness, 2004. "Attribution and Reciprocity in an Experimental Labor Market," Journal of Labor Economics, University of Chicago Press, vol. 22(3), pages 665-688, July.
    4. Altmann, Steffen & Dohmen, Thomas & Wibral, Matthias, 2008. "Do the reciprocal trust less?," Economics Letters, Elsevier, vol. 99(3), pages 454-457, June.
    5. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory of Fairness, Competition, and Cooperation," The Quarterly Journal of Economics, Oxford University Press, vol. 114(3), pages 817-868.
    6. Ernst Fehr & Michael Naef & Klaus M. Schmidt, 2006. "Inequality Aversion, Efficiency, and Maximin Preferences in Simple Distribution Experiments: Comment," American Economic Review, American Economic Association, vol. 96(5), pages 1912-1917, December.
    7. Blount, Sally, 1995. "When Social Outcomes Aren't Fair: The Effect of Causal Attributions on Preferences," Organizational Behavior and Human Decision Processes, Elsevier, vol. 63(2), pages 131-144, August.
    8. Falk, Armin & Fehr, Ernst & Fischbacher, Urs, 2008. "Testing theories of fairness--Intentions matter," Games and Economic Behavior, Elsevier, vol. 62(1), pages 287-303, January.
    9. Falk, Armin & Fischbacher, Urs, 2006. "A theory of reciprocity," Games and Economic Behavior, Elsevier, vol. 54(2), pages 293-315, February.
    10. Baran, Nicole M. & Sapienza, Paola & Zingales, Luigi, 2010. "Can we infer social preferences from the lab? Evidence from the trust game," CEPR Discussion Papers 7634, C.E.P.R. Discussion Papers.
    11. Urs Fischbacher & Simon Gachter, 2010. "Social Preferences, Beliefs, and the Dynamics of Free Riding in Public Goods Experiments," American Economic Review, American Economic Association, vol. 100(1), pages 541-556, March.
    12. James Konow, 2003. "Which Is the Fairest One of All? A Positive Analysis of Justice Theories," Journal of Economic Literature, American Economic Association, vol. 41(4), pages 1188-1239, December.
    13. James C. Cox & Daniel Friedman & Vjollca Sadiraj, 2008. "Revealed Altruism," Econometrica, Econometric Society, vol. 76(1), pages 31-69, January.
    14. Alexander W. Cappelen & Astri Drange Hole & Erik Ø Sørensen & Bertil Tungodden, 2007. "The Pluralism of Fairness Ideals: An Experimental Approach," American Economic Review, American Economic Association, vol. 97(3), pages 818-827, June.
    15. James Andreoni & Lise Vesterlund, 2001. "Which is the Fair Sex? Gender Differences in Altruism," The Quarterly Journal of Economics, Oxford University Press, vol. 116(1), pages 293-312.
    16. McCabe, Kevin A. & Rigdon, Mary L. & Smith, Vernon L., 2003. "Positive reciprocity and intentions in trust games," Journal of Economic Behavior & Organization, Elsevier, vol. 52(2), pages 267-275, October.
    17. Fischbacher, Urs & Gachter, Simon & Fehr, Ernst, 2001. "Are people conditionally cooperative? Evidence from a public goods experiment," Economics Letters, Elsevier, vol. 71(3), pages 397-404, June.
    18. Ananish Chaudhuri, 2011. "Sustaining cooperation in laboratory public goods experiments: a selective survey of the literature," Experimental Economics, Springer;Economic Science Association, vol. 14(1), pages 47-83, March.
    19. Dufwenberg, Martin & Kirchsteiger, Georg, 2004. "A theory of sequential reciprocity," Games and Economic Behavior, Elsevier, vol. 47(2), pages 268-298, May.
    20. Carpenter, Jeffrey P., 2003. "Is fairness used instrumentally? Evidence from sequential bargaining," Journal of Economic Psychology, Elsevier, vol. 24(4), pages 467-489, August.
    21. Brian Roe & Steven Y. Wu, 2005. "Social Preferences and Relational Contracting Performance: An Experimental Investigation," Microeconomics 0509006, EconWPA.
    22. Cox, James C., 2004. "How to identify trust and reciprocity," Games and Economic Behavior, Elsevier, vol. 46(2), pages 260-281, February.
    23. Raymond Fisman & Shachar Kariv & Daniel Markovits, 2007. "Individual Preferences for Giving," American Economic Review, American Economic Association, vol. 97(5), pages 1858-1876, December.
    24. Bellemare, Charles & Kröger, Sabine & van Soest, Arthur, 2011. "Preferences, intentions, and expectation violations: A large-scale experiment with a representative subject pool," Journal of Economic Behavior & Organization, Elsevier, vol. 78(3), pages 349-365, May.
    25. Dirk Engelmann & Martin Strobel, 2006. "Inequality Aversion, Efficiency, and Maximin Preferences in Simple Distribution Experiments: Reply," American Economic Review, American Economic Association, vol. 96(5), pages 1918-1923, December.
    26. Cox, James C. & Friedman, Daniel & Gjerstad, Steven, 2007. "A tractable model of reciprocity and fairness," Games and Economic Behavior, Elsevier, vol. 59(1), pages 17-45, April.
    27. James C. Cox & Cary A. Deck, 2005. "On the Nature of Reciprocal Motives," Economic Inquiry, Western Economic Association International, vol. 43(3), pages 623-635, July.
    28. Johnson, Noel D. & Mislin, Alexandra A., 2011. "Trust games: A meta-analysis," Journal of Economic Psychology, Elsevier, vol. 32(5), pages 865-889.
    29. Erlei, Mathias, 2008. "Heterogeneous social preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 65(3-4), pages 436-457, March.
    30. Offerman, Theo & Sonnemans, Joep & Schram, Arthur, 1996. "Value Orientations, Expectations and Voluntary Contributions in Public Goods," Economic Journal, Royal Economic Society, vol. 106(437), pages 817-845, July.
    31. Kanagaretnam, Kiridaran & Mestelman, Stuart & Nainar, Khalid & Shehata, Mohamed, 2009. "The impact of social value orientation and risk attitudes on trust and reciprocity," Journal of Economic Psychology, Elsevier, vol. 30(3), pages 368-380, June.
    32. Armin Falk & Ernst Fehr & Urs Fischbacher, 2003. "On the Nature of Fair Behavior," Economic Inquiry, Western Economic Association International, vol. 41(1), pages 20-26, January.
    33. Blanco, Mariana & Engelmann, Dirk & Normann, Hans Theo, 2011. "A within-subject analysis of other-regarding preferences," Games and Economic Behavior, Elsevier, vol. 72(2), pages 321-338, June.
    34. Ananish Chaudhuri & Lata Gangadharan, 2007. "An Experimental Analysis of Trust and Trustworthiness," Southern Economic Journal, Southern Economic Association, vol. 73(4), pages 959-985, April.
    35. Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March.
    36. Rabin, Matthew, 1993. "Incorporating Fairness into Game Theory and Economics," American Economic Review, American Economic Association, vol. 83(5), pages 1281-1302, December.
    37. Vyrastekova, J. & Garikipati, S., 2005. "Beliefs and Trust : An Experiment," Discussion Paper 2005-88, Tilburg University, Center for Economic Research.
    38. Gary Charness & David I. Levine, 2007. "Intention and Stochastic Outcomes: An Experimental study," Economic Journal, Royal Economic Society, vol. 117(522), pages 1051-1072, July.
    39. Roberto Burlando & Francesco Guala, 2005. "Heterogeneous Agents in Public Goods Experiments," Experimental Economics, Springer;Economic Science Association, vol. 8(1), pages 35-54, April.
    40. Burks, Stephen V. & Carpenter, Jeffrey P. & Verhoogen, Eric, 2003. "Playing both roles in the trust game," Journal of Economic Behavior & Organization, Elsevier, vol. 51(2), pages 195-216, June.
    41. Offerman, Theo, 2002. "Hurting hurts more than helping helps," European Economic Review, Elsevier, vol. 46(8), pages 1423-1437, September.
    42. Gary E. Bolton & Axel Ockenfels, 2006. "Inequality Aversion, Efficiency, and Maximin Preferences in Simple Distribution Experiments: Comment," American Economic Review, American Economic Association, vol. 96(5), pages 1906-1911, December.
    43. Berg Joyce & Dickhaut John & McCabe Kevin, 1995. "Trust, Reciprocity, and Social History," Games and Economic Behavior, Elsevier, vol. 10(1), pages 122-142, July.
    44. James Andreoni & John Miller, 2002. "Giving According to GARP: An Experimental Test of the Consistency of Preferences for Altruism," Econometrica, Econometric Society, vol. 70(2), pages 737-753, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kenta Tanaka & Keisaku Higashida & Arvin Vista & Anton Setyo Nugroho & Budi Muhamad Ruslan, 2016. "Do resource depletion experiences affect social cooperative preferences? Analysis using field experimental data on fishers in the Philippines and Indonesia," Discussion Paper Series 143, School of Economics, Kwansei Gakuin University, revised Jun 2016.
    2. Shachmurove, Yochanan & Spiegel, Uriel, 2013. "Sustainable effects of technological progress and trade liberalization," Economic Modelling, Elsevier, vol. 33(C), pages 956-964.
    3. Winschel, Evguenia & Zahn, Philipp, 2014. "When Ignorance is Bliss* : Information Asymmetries Enhance Prosocial Behavior in Dicator Games," Working Papers 13-07, University of Mannheim, Department of Economics.
    4. Kamas, Linda & Preston, Anne, 2015. "Can social preferences explain gender differences in economic behavior?," Journal of Economic Behavior & Organization, Elsevier, vol. 116(C), pages 525-539.

    More about this item

    Keywords

    Fairness; Justice; Social preferences; Trust; Reciprocity;

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:joepsy:v:33:y:2012:i:3:p:538-553. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/joep .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.