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The role of power for distributive fairness

  • Rode, Julian

    ()

    (Sonderforschungsbereich 504)

  • Le Menestrel, Marc

    ()

    (Universitat Pompeu Fabra)

We employ an experimental labour setting to study fairness in the division of gains from productive activity. The focus is on the impact of power structures on allocation decisions and on fairness perceptions. Two types of actors are involved in generating a gain, but only one contributes actively by completing a real-effort task. In three treatments, decision power to divide the gain is assigned (1) to the inactive, (2) jointly to the inactive and the active, and (3) to the active. Results show that the impact of power goes beyond changing final allocations: it also significantly alters fairness perceptions. Decision power - in particular absolute power – mediates and significantly enhances self-serving biases. Results complement studies on the psychology of fairness perceptions. Moreover, the paper discusses implications for organizational design.

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File URL: http://www.sfb504.uni-mannheim.de/publications/dp07-71.pdf
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Paper provided by Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim in its series Sonderforschungsbereich 504 Publications with number 07-71.

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Length: 24 pages
Date of creation: 12 Dec 2007
Date of revision:
Handle: RePEc:xrs:sfbmaa:07-71
Note: The authors thank Robin Hogarth, Nagore Iriberri, Rosemarie Nagel, Jordi Brandts, James Konow, Daniel Schunk as well as seminar participants at Universitat Pompeu Fabra, Universität Mannheim, Universität Konstanz and the ESA North American Meeting 2007 for their constructive comments. Financial support from the Deutsche Forschungsgemeinschaft, SFB 504, at the University of Mannheim, is gratefully acknowledged.
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  1. Gary E Bolton & Jordi Brandts & Axel Ockenfels, 2005. "Fair Procedures: Evidence from Games Involving Lotteries," Economic Journal, Royal Economic Society, vol. 115(506), pages 1054-1076, October.
  2. Hoffman, Elizabeth & McCabe, Kevin & Smith, Vernon L, 1996. "Social Distance and Other-Regarding Behavior in Dictator Games," American Economic Review, American Economic Association, vol. 86(3), pages 653-60, June.
  3. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
  4. James Konow, 2000. "Fair Shares: Accountability and Cognitive Dissonance in Allocation Decisions," American Economic Review, American Economic Association, vol. 90(4), pages 1072-1091, September.
  5. 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.
  6. 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.
  7. Paul Anand, 2000. "Procedural Fairness in Economic and Social Choice: Evidence from a Survey of Voters," Open Discussion Papers in Economics 27, The Open University, Faculty of Social Sciences, Department of Economics.
  8. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard, 1986. "Fairness as a Constraint on Profit Seeking: Entitlements in the Market," American Economic Review, American Economic Association, vol. 76(4), pages 728-41, September.
  9. Linda Babcock & George Loewenstein, 1997. "Explaining Bargaining Impasse: The Role of Self-Serving Biases," Journal of Economic Perspectives, American Economic Association, vol. 11(1), pages 109-126, Winter.
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