Disadvantageous Inequality Research Articles

Fairness perceptions and payoff allocation preferences in the online food order and delivery industry: Evidence from a real experiment

Amid concern about the welfare implications of the revenue share model between food service establishments (FSEs) and food delivery companies (FDCs), academic contributions have been mostly theoretical. Within a conceptual framework of fairness, our empirical study provides a perspective from the third party in the multi-sided market: the consumer. Following an incentivized payoff allocation experiment with 500 English food consumers, we make three observations: (1) participants prefer to make allocations to FSEs as opposed to FDCs, (2) participants who perceive fairness as a social construct (honesty, responsibility) derive the most disutility from advantageous inequality and the least disutility from disadvantageous inequality in relation to FSEs, and (3) participants who perceive fairness as a structural construct (processes, outcomes) prefer more equal payoff allocations to FSEs and FDCs. The perception of price unfairness in the online food order and delivery industry is apparent, speaking to the need to find market and policy solutions.

The effects of social exclusion on distributive fairness judgements and cooperative behaviour.

In this article, we investigate how being socially excluded (vs. included) affects people's distributive fairness judgements and their willingness to cooperate with others in subsequent interactions. For this purpose, we conducted three experiments in which we assessed individual differences in having experienced being socially excluded (Experiment 1, N = 164), and manipulated social exclusion (Experiment 2, N = 120; Experiment 3, N = 492). We studied how this impacted fairness judgements of three different outcome distributions (disadvantageous inequality, advantageous inequality, and equality) both within-participants (Experiments 1 and 2) and between-participants (Experiment 3). To assess behavioural consequences, we then also assessed participants' cooperation in a social dilemma game. Across the three experiments, we consistently found that social exclusion impacted fairness judgements. Compared to inclusion, excluded participants judged disadvantageous inequality as more unfair and advantageous inequality as less unfair. Moreover, compared to socially included participants, socially excluded participants were more willing to cooperate after experiencing advantageous rather than disadvantageous inequality, and feelings of acceptance served as a mediator in these associations.

Deliberately ignoring inequality to avoid rejecting unfair offers

Why do people punish experienced unfairness if it induces costs for both the punisher and punished person(s) without any direct material benefits for the punisher? Economic theories of fairness propose that punishers experience disutility from disadvantageous inequality and punish in order to establish equality in outcomes. We tested these theories in a modified Ultimatum Game (N = 1370) by examining whether people avoid the urge to reject unfair offers, and thereby punish the proposer, by deliberately blinding themselves to unfairness. We found that 53% of participants deliberately ignored whether they had received an unfair offer. Among these participants, only 6% of offers were rejected. As expected, participants who actively sought information rejected significantly more unfair offers (39%). Averaging these rejection rates to 21%, no significant difference to the rejection rate by participants who were directly informed about unfairness was found, contrary to our hypothesis. We interpret these findings as evidence for sorting behavior: People who punish experienced unfairness seek information about it, while those who do not punish deliberately ignore it.

Age differences of responders' decision-making in disadvantageous and advantageous inequality contexts in the ultimatum game: The role of social value orientation

The Ultimatum Game (UG) is a classic paradigm used to study fairness-related decision-making. While responders' rejection of disadvantageous inequality in the UG is known, responses to advantageous inequality and the role of social value orientation (SVO) remain unclear. This study involved 59 children of 6–8 years, 69 children of 10–12 years, 59 adolescents of 14–15 years, and 52 adult college students. It explored responders' decisions in three offer contexts, including disadvantageous inequality, equality, and especially advantageous inequality, and the role of SVO. Results showed that SVO shifted from pro-self to pro-social and back to pro-self with age. Offer contexts moderated the effect of age on rejection rates, notably advantageous inequality, reflecting age differences in social preferences. Children accepted such offers for self-interest, adolescents rejected for inequality aversion, and college students accepted for joint gain maximization. SVO mediated the effect of age on rejection rate only in advantageous inequality contexts. The results indicate diverse motivation and decisions across scenarios, tied to age and SVO. Pro-social orientation's significance in advantageous inequality aversion is highlighted. Overall, these findings suggest that responder traits and developmental stages jointly shape economic decisions, especially regarding advantageous inequality.

Testosterone administration modulates inequality aversion in healthy males: evidence from computational modeling

Fairness concerns play a prominent role in promoting cooperation in human societies. Social preferences involving fairness concern have been associated with individual testosterone levels. However, the causal effects of testosterone administration on fairness-related decision making remain to be elucidated. Here, we used a randomized, double-blind, between-participant design and administered testosterone or placebo gel to 120 healthy young men. Three hours after administration, participants performed a modified Dictator Game from behavioral economics, in which they were asked to choose one of two monetary allocations between themselves and anonymous partners. Participants were either in a position of advantageous inequality (i.e., endowed with more than others) or disadvantageous inequality (i.e., endowed with less than others). Computational modeling showed that inequality-related preferences explained behavior better than competing models. Importantly, compared with the placebo group, the testosterone group showed significantly reduced aversion to advantageous inequality but enhanced aversion to disadvantageous inequality. These findings suggest that testosterone facilitates decisions that prioritize selfish economic motives over fairness concerns, which in turn may boost status-enhancing behaviors.

Equity preferences and abatement cost sharing in international environmental agreements

AbstractThis paper examines empirically the importance of equity preferences for the formation of international environmental agreements (IEA) for transboundary pollution control. Although it has been shown theoretically that the existence of equity preferences among countries considering an IEA increases the chances for formation and stability of a coalition, empirical assessments of such preferences have been limited to climate change mitigation and single‐country studies. We consider the case of marine plastic pollution, of which a large share consists of food and beverage containers, representing a transboundary pollution control problem of increasing policy concern, with properties that lead to distinct considerations for equity and the sharing of abatement costs. We employ a coordinated choice experiment in the United Kingdom and United States to assess preferences for abatement‐cost allocations in a marine plastics IEA. Pairs of cooperating countries and the relative allocation of abatement costs are varied experimentally. Results show systematic aversion to both advantageous and disadvantageous inequality with respect to abatement costs but also that the relative strength of advantageous and disadvantageous inequality aversion differs across countries. Across both countries, there is evidence that left‐leaning voters generally favor more equal international sharing of abatement costs. Differences of these results from the case of greenhouse gas emission reduction, and implications for current efforts to establish a legally binding global treaty on marine plastic pollution, are discussed.

Price squeeze under fairness: the road to supply chain coordination with a powerful retailer

This research investigates the impacts of the manufacturer’s fairness concerns on the supply chain performance when the power retailer implements a price squeeze and market service investment together. Through game-theoretic modeling, we find that 1) in the absence of fairness, although the manufacturer may be worse off due to possessing imperfect information on the price squeeze rate, the channel may be coordinated through an ex-ante negotiation between the two parties. 2) When the manufacturer has fairness concerns for price squeeze, both channel performance and brand goodwill are made worse by disadvantageous inequality and improved by advantageous inequality versus the case of no fairness concerns. Furthermore, channel members’ ex-ante negotiations regarding a profit reallocation scheme under certain conditions may achieve the following three objectives: generating a channel profit of the coordination level, promoting brand goodwill to the level of the integrated channel, and creating an equitable channel relationship.

Costly information acquisition: The influence of stakeholder earnings

Information is often acquired within organizations that generate earnings for employees and stakeholders. In this paper we analyze the causal effects of inequality on information acquisition performance and vary the pay of agents relative to the earnings of passive stakeholders. Our experimental results reveal that disadvantageous inequality does not have a negative effect on agents’ performance.

By-state fairness in selling to the newsvendor

Previous studies assume that the decision makers under supply chain contracting built on the newsvendor problem have by-expectation fairness concerns, that is, an aversion to the inequality of expected profits. However, recent experimental data show that they are actually averse to the inequality of profits at each demand realization, which is referred to as by-state fairness concerns. This paper examines how by-state fairness concerns (only disadvantageous inequality aversion) influence the equilibrium outcomes under a selling-to-the-newsvendor model. Compared with the fairness-neutral case, while the retailer’s concern for by-expectation fairness (only disadvantageous inequality aversion) can improve supply chain performance, his strong concern for by-state fairness can worsen it. In particular, when demand variance is large, the retailer can earn less for by-state fairness concerns. Similar to by-expectation fairness, the supplier’s by-state fairness concerns can hurt both her and the retailer. The supplier’s profit decreases with demand variance, whereas the retailer’s expected profit is nonmonotone with it. When both supply chain agents care about by-state fairness, compared with the fairness-neutral case, the supplier’s profit decreases, whereas the retailer’s expected profit can either increase or decrease. The region where the retailer earns more will shrink in either the supplier’s disadvantageous inequality parameter or demand variance.

Economic inequality and depressive symptoms: an individual versus aggregate-level analysis using Mexican survey data

BackgroundThere is a lack of consensus on the relationship between economic inequality and mental health, which may be due to the measures of inequality used in empirical studies. We studied...

Beliefs estimated from choices in Proposer-Responder Games

Abstract We use a large public dataset of proposer-responder games to examine other-regarding preferences and beliefs. We model preferences and beliefs within a quantal response equilibrium framework using a non-linear mixed logit model that takes individual heterogeneity into account. Several measures indicate that parameters are reliably identified. Our participants are heterogeneous with respect to preferences and more so with regard to beliefs about others’ preferences. On average, proposers overestimate responders’ aversion to advantageous inequality, and think of responders as more averse to advantageous inequality and less averse to disadvantageous inequality than themselves. These findings are consistent with an optimism bias.

Distributional Preferences in Larger Groups: Keeping up with the Joneses and Keeping Track of the Tails

AbstractWe study distributional preferences in larger “societies”. We conduct experiments via Mechanical Turk, in which subjects choose between two income distributions, each with seven (or more) individuals, with hypothetical incomes that aim to approximate the actual distribution of income in the United States. In contrast to prior work, our design allows us to flexibly capture the particular distributional concerns of subjects. Consistent with standard maximin (Rawlsian) preferences, subjects select distributions in which the bottom individual’s income is higher (but show little regard for lower incomes above the bottom ranking). In contrast to standard models, however, we find that subjects select distributions that lower the top individual’s income, but not other high incomes. Finally, we provide evidence of “locally competitive” preferences—in most experimental sessions, subjects select distributions that lower the income of the individual directly above them, whereas the income of the individual two positions above has little effect on subjects’ decisions. Our findings suggest that theories of inequality aversion should be adapted to account for individuals’ aversion to “topmost” and “local” disadvantageous inequality.

Channel coordination between manufacturers and competing retailers with fairness concerns

This study provides a game-theoretic analysis for channel coordination of a two-tier supply chain in which retailers have fairness concerns. We explore a setting in which a single manufacturer sells its product to consumers through two competing retailers that are horizontally differentiated at varying levels. We extend the previous literature, which examines only monopolistic supply chains.We show that the channel can be successfully coordinated in equilibrium in that the total channel profit is maximized and the retailers do not incur disutility due to disadvantageous inequality, even if they are not averse to their advantageous inequality. Specifically, only if the retailers are moderately differentiated is a fair channel successfully achieved. In addition, we find that in a market in which a fair channel is coordinated in equilibrium, the retailers necessarily benefit from their fairness concerns.Furthermore, we investigate a situation in which the ideal distribution ratios between the channel members can be endogenously chosen prior to subsequent pricing stages. Interestingly, even if such endogenous choices are allowed for the retailers, a fair channel still can be coordinated in equilibrium. Specifically, the retailers set their ideal ratios in equilibrium at the lowest level in their feasible ranges of successful coordination. However, this results in the prisoner’s dilemma, because if they were allowed to collude to set the ratios, the retailers would benefit the most from the highest level in the feasible ranges.

Risk-taking and fairness among cocaine-dependent patients in dual diagnoses: Schizophrenia and Anti-Social Personality Disorder

This study reports experimental results from a clinical sample of patients with a cocaine-related disorder and dual diagnosis: Schizophrenia and Anti-Social Personality Disorder. Both types of patients as well as a non-clinical group of students performed two incentivized decision-making tasks. In the first part of the experiment, they performed a lottery-choice task in order to elicit their degree of risk aversion. In the second part, they decided in two modified dictator games aimed at eliciting their aversion to advantageous and disadvantageous inequality. It is found that the Anti-Social Personality Disorder group exhibits no significant differences from the non-clinical sample in either task. However, compared with the students’ sample, subjects from the group with schizophrenia show more risk aversion and exhibit more aversion towards disadvantageous inequality.

Consumer inequality aversion and risk preferences in community supported agriculture

In community-supported agriculture (CSA), consumers face a tradeoff between (i.) the desire to support a CSA farmer and obtain environmentally-friendly goods and (ii.) the risk associated with a long-term commitment. We elicit inequality aversion and risk preferences of a sample of 162 French CSA consumers using incentivized field experiments. We find that CSA consumers are concerned about payoff inequalities. While we obtain evidence of advantageous inequality aversion toward CSA farmers, we also find disadvantageous inequality seeking. We find that CSA consumers are risk averse and loss averse and distort probabilities. We also observe that inequality and risk preferences in the loss domain might complement each other to strengthen consumers' support for CSA farmers.

Prospect Theory, Fairness, and the Escalation of Conflict at a Negotiation Impasse*

AbstractWe study a bilateral negotiation set‐up where, at a bargaining impasse, the disadvantaged party chooses whether to escalate the conflict or not. Escalation is costly for both parties, and it results in a random draw of the winner of the escalated conflict. We derive the behavioral predictions of a simple social utility function, which is convex in disadvantageous inequality, thus connecting the inequity aversion and the prospect theory models. Our causal laboratory evidence is, to a large extent, consistent with the predicted effects. Among other things, the model predicts that the escalation rate is higher when escalation outcomes are riskier, and that the disagreement rate is lower when the cost of escalating the conflict is higher.

Analysis of inequality aversion in mice using stress-induced hyperthermia

Humans have a sense of fairness and consequently have an aversion to inequality condition. Recently, animal researchers have suggested that some non-human animals also exhibit an aversion to inequality. This experiment used stress-induced hyperthermia (SIH) to examine inequality aversion in mice. Aversion was analyzed using inequitable restraint stress in Experiment 1. The mice that were restrained, but had free cage mates (disadvantageous inequality) displayed SIH. In contrast, free mice that had restrained cage mates (advantageous inequality) did not show SIH. Inequitable food delivery was used to induce SIH in Experiment 2. Food deprived mice who were surrounded by cage mates who were consuming food (disadvantageous inequality) displayed SIH. The mice that received food and were surrounded by food-deprived cage mates (advantageous inequality) also showed some increase in body temperature, but the increase was not significantly higher than that in the equality condition (where all mice received food). Pre-feeding of the test mice attenuated SIH in the disadvantageous condition suggesting that satisfied mice do not display disadvantageous inequality aversion. These results showed disadvantageous inequality aversion in mice in both negative (restraint) and positive (food) situations but not advantageous inequality aversion.

Fairness or benefit? The effect of power on distributive fairness

<p id="C2">Distributive fairness is a basic behavioral norm and an important pursuit in our daily life, and it plays an important role in our social interactions. In studies of distributive fairness, individuals' fairness perception and the factors affecting it have gathered much research attention. Previous research shows that the degree of fairness allocation can affect individuals' fairness perception. Based on the equity theory of fairness, equal allocation can be perceived as fairness for individuals if they have equal ability and equal contribution to the allocation; less than equal allocation may be perceived as disadvantageous inequality, and more than equal allocation as advantageous inequality. Previous studies also suggest that social situations, such as social hierarchy and social distance, can affect individuals' fairness perception. In real life, resource allocation often involves power situations, in which individuals may have different levels of power. How power influence individuals' fairness perception? Is the fairness perception power-dependent? So far, few studies have explored the effect of power on fairness perception directly. The present study aims to address this question through three experiments. <br/><p id="C70">Based on the approach-inhibition theory, the powerful usually expect themselves to be surrounded by rewards and lack of threats, while the powerless usually expect themselves to be surrounded by threats and lack of rewards. Previous research shows that individuals' cognition and behavior can be affected by their internal expectations, and they are often sensitive to outcomes that violate their own expectations. Equal allocation and advantageous inequality allocation mean reward, while disadvantageous inequality means threat. Thus, equal allocation and advantageous inequality allocation are the expectation of the powerful, and disadvantageous inequality allocation is the expectation of the powerless. Therefore, we hypothesize that the interaction between power and fairness degree can impact individuals' fairness perception. <br/><p id="C71">Three experiments were designed to test the hypothesis. To provide objective basis for the definitions of fairness, disadvantage inequality, and advantage inequality, we measured individuals' fairness ratings on different allocations in both the powerful and the powerless situations, after situation priming that manipulated power perception, in Experiment 1. In Experiment 2, we further investigated individuals' fairness ratings on three different allocations (i.e., disadvantageous unequal allocation, equal allocation, advantageous unequal allocation) in both the powerful and the powerless situations. We also recorded individuals' reaction times of fairness rating in Experiment 2 to gather extra evidence for fairness perception. In Experiment 3, a different manipulation method, role playing, was used to prime power. Same as in Experiment 2, we also recorded the fairness ratings and reaction times of the powerful and the powerless in Experiment 3. <br/><p id="C72">In terms of fairness rating scores, the powerful rated the fairness degree of equal allocation and advantageous unequal allocation higher than the powerless, and they rated the fairness degree of disadvantageous unequal allocation lower than the powerless. In reaction time, the powerful reacted faster than the powerless no matter what the allocation was. These results suggested that individuals' distributive fairness perception is power-dependent, supporting our hypothesis. The present findings provide experimental evidence for the approach-inhibition theory of power and the equity theory of fairness. They also improve our understanding of the relationship between power and fairness perception.

Religious fragmentation, social identity and other-regarding preferences: Evidence from an artefactual field experiment in India

We examine the impact of religious identity and village-level religious fragmentation on other-regarding preferences. We report on a series of two-player binary Dictator experiments conducted on a sample of 516 Hindu and Muslim participants in rural West Bengal, India. Our treatments are the identity of the two players and the degree of religious fragmentation in the village where subjects reside. Both Muslims’ and Hindus’ aversion to advantageous inequality declines as the probability of facing an out-group member increases. We find no evidence of aversion to disadvantageous inequality on either religious sample. Both Muslim and Hindu participants display aversion to advantageous inequality in both fragmented villages and homogeneous villages. The effect of village fragmentation on aversion to disadvantageous inequality differs across religious groups.

4-6 Yaş Çocuklarında Kaynak Dağıtımında Eşitsizlikten Kaçınmayı Etkileyen Faktörlerin İncelenmesi

<div><!--block-->The aim of this study was to investigate the effects of collaboration, inequality type and cost on inequality aversion in resource distribution in preschool children. With this aim, 80 (39 boys, and 41 girls) children between 50-72 months (M=62 months) old took part in the study. There were two experimental groups and one control group in the study. In one of the experimental groups, there was full collaboration and in the other, there was half collaboration. The forced choice paradigm was used to measure inequality aversion and it was also determined whether equal distribution options between children and their partners were chosen by participants more than unequal ones. Using the forced choice paradigm, the way in which inequality aversion was influenced by inequality type and cost was explored (Sheskin, Bloom &amp; Wynn, 2014). Cost refers to is whether the participant child’s own resource has the same number of equal and unequal distribution options in the game. Inequality type refers to unequal distribution options in the game being either disadvantageous or advantageous. Disadvantageous inequality is the situation where someone receives less than the partner whereas advantageous inequality is the situation where someone receives more than their partner (Fehr &amp; Schmidt, 1999). Mixed model ANOVA was used for data analysis. Collaboration was treated as a between-subjects factor and inequality type and cost were treated as within-subject factors. The findings show (inconsistent with currently available literature), that there is no significant effect of collaboration on inequality aversion and children show more inequality aversion in the advantageous inequality type than the disadvantageous type. Furthermore, it was found that cost has a significant effect on inequality aversion and children show more inequality aversion in no-cost distributions than cost ones. The results do not appear to support a general-universal inequality aversion principle in this age group.</div>