Effort transparency and fairness

We study how transparent information about effort impacts the allocation of earnings in a dictator game experiment. We manipulate information about the respective contributions to a joint endowment that a dictator can keep or share with a counterpart. A humanomics framework for understanding human behavior predicts that subjects in the laboratory may give up money to follow learned social rules of conduct. We observe, accordingly, that many dictators adopt a meritocracy norm even if the receiver cannot observe them. However, receivers earn higher payments on average when transparency about effort provision for an earned endowment is complete. Under conditions of non-transparency, some dictators take advantage of the opportunity to send less because the receiver will not know what a fairer allocation would have been. Our results confirm previous findings about social distance and how subjects react to the possibility of disappointing observers. Our results also imply that outcomes for employees within organizations can be affected by the level of transparency for effort contributions.