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Third-party fairness Lars-Olof Johansson & Henrik Svedsäter Göteborgs Universitet, Sweden, 2009

Third-party fairness Lars-Olof Johansson & Henrik Svedsäter Göteborgs Universitet, Sweden, 2009. Lars-Olof Johansson Department of Psychology 2008-06-01. Fairness between me and two others. Egocentric fairness “inequality aversion”:

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Third-party fairness Lars-Olof Johansson & Henrik Svedsäter Göteborgs Universitet, Sweden, 2009

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  1. Third-party fairness Lars-Olof Johansson & Henrik Svedsäter Göteborgs Universitet, Sweden, 2009 Lars-Olof Johansson Department of Psychology 2008-06-01

  2. Fairness between me and two others Egocentric fairness “inequality aversion”: advantageous / disadvantageous positions (Fehr & Schmidt, 1999) Dm A B Lars-Olof Johansson Department of Psychology 2008-06-01

  3. Fairness between two others Dm Student 1 Student 2

  4. Aims of four experiments • To testfairnessbetween others in both advantageous and disadvantageous positions, extending Fehr and Schmidt (1999) • To test the stability of fairness • To test whether fairness depends on how much room is given for motivated reasoning (Kunda, 1990)

  5. Methods • We induce conflicts between self-interest and fairness • Decision makers pay real money to ensure fairness • Factorial designs • Preference ratings

  6. Between-group designs • Pre-determined group • Coin-flip group • Forced choice group

  7. Choice examples Experiment 1 (one group, in classrooms)

  8. Results Experiment 1 (n = 52)

  9. Experiment 2 • Pre-determined group • Coin-flip group

  10. Experiment 2 (two groups) Pre-determined (by us) group

  11. Experiment 2 Coin-flip group

  12. Results Experiment 2 (n = 74)

  13. Results Experiment 2 (n = 74)

  14. Experiment 3 Preference rating Alternative A Alternative B

  15. Experiment 3 • Pre-determined group • Coin-flip group

  16. Results Experiment 3 (n = 112) Mean preference for fair alternatives

  17. Experiment 4 (3 groups) • Pre-determined group • Coin-flip group • Forced choice group

  18. Experiment 4 Forced choice group

  19. Results Experiment 4 (n = 164) Mean preference for fairness on a scale from 4 (fair) to -4(greed)

  20. Conclusions Egocentric inequality aversion (Fehr & Schmidt, 1999) is replicated People are averse against third-party inequalities Third-party fairness is sensitive to context - Interactions between egocentric position and contextual factors

  21. Take home message! People care for third-party fairness and are willing to pay for upholding it! The influence of third-party fairness depends largely on the decision context!

  22. Reference Johansson, L.-O. & Svedsäter, H. (in press). Piece of cake? Allocating rewards when fairness is costly. Organizational Behaviour and Human Decision Processes.

  23. Thank you!

  24. Fairness between me and two others Dm (50, 90) Adv. diff 0,60 = (50+70)/2 Student 1 (50, 40) Student 2 (50, 20) Third. diff 0, 20 = 40-20

  25. Fehr and Schmidt model Set of players indexed by let Where and The first term , is the material payoff of decision maker i The second term measures the utility loss from disadvantageous inequity The third term measures the utility loss from advantageous inequity. . ,

  26. Proposed new model . ,

  27. Experiment 2 (two groups individually) Pre-determined group

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