Normative and Instrumental Functions of Equity Criteria in Individual Choices of the Input-Payoff Distribution Pattern

Abstract

This article examines how utility and equity criteria interact to account for individual choices between alternative combinations of inputs and payoffs in a group. Two kinds of utility criteria are assumed: One is purely individualistic (self-interest) and the other includes consequences of one's choice for other members of a group (cooperation, competition). Three criteria of equity and justice are taken into account: equality of payoffs, the right payoff (according to contribution), and relative equity. An experiment was designed to make a subject choose from each pair of a set of 16 alternative distributions of two levels of inputs and payoffs for himself and a partner who was unknown to him. The subjects' choices turned out to be basically consistent, the number of circular triads being much below chance expectation. The utilitarian criteria were more commonly applied than the egalitarian ones, with predominance of self-interest and cooperation. However, 68% of the subjects used a mixture of rules similar to maximin, whereby both the Rawlsian claim of distributive justice and the Pareto-optimal demands were partly satisfied. The criteria of equity and justice operated the impersonal, normative way only up to a certain level of the subjects' losses. They were also used interchangeably to justify the subjects' own gains and to prevent their partners from gaining more than they did.