A Decision-Making Phase-Space Model for Fairness Assessment

Abstract

Toward the goal of delineating the underlying decision-making process in relation to fairness, a mathematical model describing the decision criteria is derived. In this fairness-decision model, the decision-making criteria are limited to choose between fairness, equity/disparity and monetary gain. In this model, the decision threshold criteria are represented by the graphical location of the decision space in the fairness-equity quadrant. The fairness decision criterion is determined by the relativistic fairness stimulus-response function representing the relationship between fairness and disparity. The disparity/equity decision criterion is determined by the disparity of the monetary offer. The decision threshold is represented by the graphical intersection between the fairness stimulus-response function and the disparity function. The analysis shows that monetary gain or loss is a consequence of the decision, rather than a decision criterion, unless the decision is already predetermined. The analysis also shows that the paradoxical decisions that seem to be irrational (such as rejecting hyper-equitable offers) are, in fact, logically consistent without being paradoxical or irrational. It is resulted from a bias in fairness perception that shifts the fairness stimulus-response function up/down or left/right around the four fairness-equity quadrants. If either fairness or equity/disparity were used as the sole criterion for decision, no paradox would exist. It is only when both fairness and equity/disparity were used as the decision criteria simultaneously that would have resulted in a paradoxical decision under certain circumstances. But such paradox is merely a shift/bias in the fairness perception without being irrational, as predicted by the present relativistic fairness-equity model.