When Inequality is Good for Groups: The Moderating Role of Fairness

Abstract

Many societies today are experiencing growing inequality in terms of wealth, income, health, education, resources or opportunities, trends that have negative effects upon well-being, trust, and motivation. We investigated whether inequalities –– particularly those perceived as fair –– can have positive effects upon individuals and groups. Using cross-national survey data (Study 1) and experimental data (Study 2), we find that inequalities arising from merit-based processes are perceived as fairer and as less acute. Further, in two experimental studies, using both monetary and real-effort social dilemmas, we demonstrate that inequalities perceived as procedurally fair can promote cooperation and trust. Participants received payments based on a fair (merit-based) or unfair (luck-based) process prior to being assigned to a group in which the other members’ payments were either equal or unequal to their own. We then measured positive contributions to the group via monetary contributions to a public good (Study 3) or a real-effort cooperation task (Study 4). Compared to conditions of equality, participants were more likely to cooperate when inequality of initial payments was perceived as fair, and less likely to contribute when inequality was perceived as unfair. We disentangle the effects of inequality and fairness on behavior, and underscore the importance of understanding how people construe the systems that give rise to inequality to an understanding of inequality’s effects on motivation and cooperation.