Disadvantageous Inequity Research Articles

Decision-making and coordination in the contract-farming supply chain with fairness concern and output uncertainty

Supply chain members’ fairness concern, which may be disadvantageous or advantageous inequity averse, is a key factor affecting their cooperation and operation efficiency. Unfair distribution of profits will harm the efficiency of supply chain. In this paper, we consider a contract-farming supply chain consisting of an enterprise and a farmer with fairness concerns and uncertain output, where the enterprise is the leader and the farmer is the follower. We construct three Stackelberg game models: benchmark case without fairness concern, one with the enterprise’s inequity aversion and the other with both parties’. We study the impact of fairness concerns on the optimal decisions of supply chain members. The results show that: (1) When the farmer is neutral or faces disadvantageous inequity, the enterprise’s profit and expected utility are always smaller than that of the benchmark case, while the farmer is likely to benefit. (2) In contrast to previous studies, we find that an increase in wholesale price will lead to lower production input when both parties face disadvantageous inequity. (3) When both parties face advantageous inequity, it can achieve a win-win cooperation if the output uncertainty is high and the degree of the farmer’s advantageous inequity is low.

The power of prompts: Encouraging children to think about fairness promotes the costly rejection of unfairness.

Children in the United States have an early-emerging understanding that resources should be divided fairly among agents, yet their behavior does not begin to reflect this understanding until later in development. Why does this gap between knowledge and behavior exist, and how can we close it? Here, we tested the role of explicit prompts in closing the gap, asking whether prompting 4- to 9-year-olds to make fair decisions would promote the costly rejection of unfairness in the Inequity Game. Children were presented with either advantageous (more for actor, less for recipient) or disadvantageous (less for actor, more for recipient) allocations and assigned to one of three experimental conditions: Fairness Prompt, Autonomous Prompt, or Baseline. Prompt condition had a strong effect on advantageous but not disadvantageous inequity aversion. Indeed, a simple fairness prompt was enough to reveal advantageous inequity aversion at 5 years of age, roughly 2 years before it was seen in children in the Autonomous Prompt or Baseline conditions. This study points to the promise of simple prompts as a powerful means of encouraging costly fair behavior in childhood. (PsycInfo Database Record (c) 2024 APA, all rights reserved).

No evidence for inequity aversion in non-human animals: a meta-analysis of accept/reject paradigms.

Disadvantageous inequity aversion (IA), a negative response to receiving less than others, is a key building block of the human sense of fairness. While some theorize that IA is shared by species across the animal kingdom, others argue that it is an exclusively human evolutionary adaptation to the selective pressures of cooperation among non-kin. Essential to this debate is the empirical question of whether non-human animals are averse towards unequal resource distributions. Over the past two decades, researchers have reported that individuals from a wide range of taxa exhibit IA; tasks where participants can reject or accept a given distribution of rewards delivered the bulk of this evidence. Yet these results have been questioned on both conceptual and empirical grounds. In the largest empirical investigation of non-human IA to date, we synthesize the primary data from 23 studies using accept/reject tasks, covering 60 430 observations of 18 species. We find no evidence for IA in non-human animals in these tasks. This finding held across all species in the dataset and pre-registered subsets (all species reported to exhibit IA, primates reported to exhibit IA, chimpanzees and capuchin monkeys). Alternative interpretations of the data and implications for the evolution of fairness are discussed.

Signaling or not? The pricing strategy under fairness concerns and cost information asymmetry

Supply chain fairness issues have become crucial and prevalent recently, whereas the operational decisions in the fair chain are more and more challenging when involving information asymmetry. Considering the fact that the upstream supplier of a chain generally has private production cost information, this paper investigates how the supplier strategically makes pricing decisions under the own private information and the downstream fairness concerns. Based on inequity aversion theory, we set up a signaling game between the supplier and the retailer with two kinds of inequity aversion, disadvantageous inequity aversion and advantageous inequity aversion, respectively. Compared with the scenario of symmetric information, under asymmetric information, we find that: the high-cost supplier distorts the wholesale price upward to avoid the low-cost supplier's price mimicry when the retailer has disadvantageous inequity aversion and the cost difference between the two types of suppliers is small; the supply chain's expected profit and expected utility may increase due to the reason that the low-cost supplier distorts his wholesale price downward when the retailer has advantageous inequity aversion, which mitigates the double marginalization. Moreover, we extend the base model to the scenario of endogenous prior probability on supplier cost type and we show that when the retailer has disadvantageous inequity aversion, cost information asymmetry may improve the willingness of the high-cost supplier to become the low-cost supplier. Our results can provide some practical insights on managing cost information asymmetry from the perspectives of the supply chain and the industry.

Egalitarian preferences in young children depend on the genders of the interacting partners

In decisions between equal and unequal resource distributions, women are often believed to be more prosocial than men. Previous research showed that fairness attitudes develop in childhood, but their—possibly gendered, developmental trajectory remains unclear. We hypothesised that gender-related fairness attitudes might depend not only on the gender of the Allocator, but also on that of the Recipient. To examine this, we tested 332 three to 8-year-old children in a paired resource allocation task, with both boys and girls acting as Allocators and Recipients. We indeed found gender-related effects: girls more than boys aimed to reduce advantageous inequity, and Allocators of both genders were more averse against male Recipients being better off. Notably, older girls exhibited an envy bias, i.e., they tolerated disadvantageous inequity more when the resource allocation was in favour of other girls than when it favoured boys. We also observed a gender-related spite gap in boys aged 7-8: unlike girls, boys treated other boys with spite, i.e., they valued unfair distributions in their own favour over equal outcomes, especially if rejecting advantageous inequity was costly. This pattern hints at contextualised gender-related fairness preferences that evolve with age that could depend on same- and cross-gender past interaction experiences.

Time pressure increases children's aversion to advantageous inequity.

The relative contribution of intuitive and reflective cognitive systems in cooperative decision making is a topic of hot debate. Research with adults suggests that intuition often favors cooperation, but these effects are contextually sensitive. Emerging evidence has shown that in many contexts children show a tendency toward intuitive cooperation, but research investigating these processes in children is sparse and has produced mixed findings. In the current study we investigated the influence of intuitive and reflective decision processes on children's fairness behavior by manipulating decision time. We tested (N = 158) pairs of children between 4 and 10 years of age from a rural community in Canada. Children's decisions to accept or reject allocations of candies were either made under time pressure or after a 10-s delay. We assessed the impact of decision time on children's aversion to inequitable distributions of resources by comparing their responses to equal allocations with either disadvantageous allocations or advantageous allocations. We found that children showed a greater age-related increase in advantageous inequity aversion when decisions were made under time pressure compared to when they were made after a delay. In contrast, we did not observe a significant impact of decision time on the development of disadvantageous inequity aversion. These findings suggest that intuitive decision processes may contribute to the development of fairness concerns in middle childhood.

Win-win or lose-lose: Children prefer the form of equality

In middle childhood, children's sense of fairness further develops, they are willing to pay a cost to maintain equality. Win-win and lose-lose are two forms of equality. Win-win equality refers to both parties maximizing benefits, while lose-lose equality means both parties incurring the maximum loss. Win-win equality allows third party upholding fairness to gain more reputational benefits without the violator being punished, embodying the principle of “benefiting oneself without harming others”. On the other hand, lose-lose equality is a more deterrent form of fairness with the violator getting punished, and the third-party might experience a situation of “effort without appreciation.” However, the specific form of equality which school-aged children prefer still requires further exploration. Therefore, adopting the dictator game paradigm of third-party punishment, we design two experiments to investigate the fairness preference of first to fourth-grade children when acting as a third party and to clarify patterns of age-related changes. Study 1 (N = 111) explored children's preferred form of fairness under advantageous inequity conditions. Study 2 (N = 122) further examined children's fairness preferences in disadvantageous inequity situations. The findings suggest that when confronted with inequitable distributions, whether rooted in disadvantageous or advantageous inequity, children display a notable tendency to utilize third-party punishment to achieve an equal allocation. Meanwhile, this tendency strengthens as they progress in grade levels. Notably, children consistently manifest a preference for win-win equality, highlighting their inclination towards mutually beneficial outcomes.

Neurophysiological analysis of disadvantageous social inequity: Exploring emotional behavior changes and c-Fos expression in a male rat model

Humans and other animals exhibit aversive behavioral and emotional responses to unequal reward distributions compared with their conspecifics. Despite the significance of this phenomenon, experimental animal models designed to investigate social inequity aversion and delve into the underlying neurophysiological mechanisms are limited. In this study, we developed a rat model to determine the effects of socially equal or unequal reward and stress on emotional changes in male rats. During the training session, the rats were trained to escape when a sound cue was presented, and they were assigned to one of the following groups: all escaping rats [advantageous equity (AE)], freely moving rats alongside a restrained rat [advantageous inequity (AI)], all restrained rats [disadvantageous equity (DE)], and a rat restrained in the presence of freely moving companions [disadvantageous inequity (DI)]. During the test session, rats in the advantageous group (AE and AI) escaped after the cue sound (expected reward acquisition), whereas rats in the disadvantageous group (DE and DI) could not escape despite the cue being presented (expected reward deprivation). Emotional alteration induced by exposure to restraint stress under various social interaction circumstances was examined using an open field test. Notably, the DI group displayed reduced exploration of the center zone during the open field tests compared with the other groups, indicating heightened anxiety-like behaviors in response to reward inequity. Immunohistochemical analysis revealed increased c-Fos expression in the medial prefrontal and orbitofrontal cortices, coupled with reduced c-Fos expression in the striatum and nucleus accumbens under DI conditions, in contrast to the other experimental conditions. These findings provide compelling evidence that rats are particularly sensitive to reward inequity, shedding light on the neurophysiological basis for distinct cognitive processes that manifest when individuals are exposed to social equity and inequity situations.

Common and distinct equity preferences in children and adults.

Fairness plays a crucial role in children's social life and has garnered considerable attention. However, previous research and theories primarily examined the development of children's fairness behaviors in the conflict between self-interest motivation and fairness-complying motivation, neglecting the influence of advantage-seeking motivation. Moreover, despite the well-established role of gain/loss frame in human decision-making, it remains largely unclear whether the framing effect modulates fairness behaviors in children. It was hypothesized that children would exhibit advantage-seeking motivation resulting in more selfish behaviors in the loss context. To examine the hypothesis, we combined an adapted dictator game and computational modeling to investigate various motivations underlying fairness behaviors of children in both loss and gain contexts and to explore the developmental directions by contrasting children and adults. In addition, the current design enabled the dissociation between fairness knowledge and behaviors by asking participants to decide for themselves (the first-party role) or for others (the third-party role). This study recruited a total of 34 children (9-10 years, Mage = 9.82, SDage = 0.38, 16 females) and 31 college students (Mage = 19.81, SDage = 1.40, 17 females). The behavioral results indicated that children behaved more selfishly in first-party and more fairly in third-party than adults, without any significant framing effects. The computational results revealed that both children and adults exhibited aversion to advantageous and disadvantageous inequity in third-party. However, they showed distinct preferences for advantageous inequity in first-party, with advantage-seeking preferences among children and aversion to advantageous inequity among adults. These findings contribute to a deeper understanding of children's social preferences and their developmental directions.

Causal roles ofprefrontal andtemporo-parietal theta oscillations forinequity aversion.

The right temporo-parietal junction (rTPJ) and the right lateral prefrontal cortex (rLPFC) are known to play prominent roles in human social behaviour. However, it remains unknown which brain rhythms in these regions contribute to trading-off fairness norms against selfish interests as well as whether the influence of these oscillations depends on whether fairness violations are advantageous or disadvantageous for a decision maker. To answer these questions, we used non-invasive transcranial alternating current stimulation (tACS) to determine which brain rhythms in rTPJ and rLPFC are causally involved in moderating aversion to advantageous and disadvantageous inequity. Our results show that theta oscillations in rTPJ strengthen the aversion to unequal splits, which is statistically mediated by the rTPJ's role for perspective taking. In contrast, theta tACS over rLPFC enhanced the preference for outcome-maximizing unequal choices more strongly for disadvantageous compared to advantageous outcome distributions. Taken together, we provide evidence that neural oscillations in rTPJ and rLPFC have distinct causal roles in implementing inequity aversion, which can be explained by their involvement in distinct psychological processes.

Refining the freeloading and no purchase behavior in pay as you wish pricing

Pay as you wish (PAYW) pricing offers a radical shift from posted pricing schemes. Modeling consumer behavior under PAYW pricing promises insights into conditions under which PAYW is profitable. Firstly, this paper extends an established model that builds on inequity-averse consumers and models their behavior in PAYW as well as the seller’s profits. The paper uses a comprehensive approach to describe consumers with low fairness concerns and points to a new segment of consumers who were not considered in previous PAYW models. They are characterized by a decision not to buy a good under a PAYW pricing policy, even if they can get it for free, and are not strongly averse to advantageous inequity. Secondly, the paper discusses the profitability of PAYW with a suggested price when the seller’s ability to suggest high prices is limited. Thirdly, the paper incorporates the effect of disadvantageous inequity aversion on PAYW with a minimum price. Finally, the paper offers guidelines on how a seller should choose the optimal pricing policy.

Increased neural activity of right temporo-parietal junction causes different effect on altruism in situations of advantageous and disadvantageous inequity

Altruism is defined as the performance of “costly acts that confer economic benefits on other individuals”, which is one of the major puzzles in the behavioural sciences today. Altruistic behaviour not only facilitates interpersonal adaptation and harmony but also enhances social welfare and social responsibility. The right temporo-parietal junction (rTPJ) has been proposed as playing a key role in guiding human altruistic behaviour, but its precise functional contribution to altruistic behaviour in situations of advantageous and disadvantageous inequity remains unclear. The purpose of this study was to modulate the activation of the rTPJ through transcranial direct current stimulation (tDCS) in order to clarify the causal role of the rTPJ in altruistic behaviour in situations of advantageous and disadvantageous inequity. A total of 106 participants were randomly assigned to one of three stimulation conditions: anodal tDCS stimulation on the rTPJ; sham tDCS stimulation on the rTPJ and anodal tDCS stimulation on the primary visual cortex (VC)as the control group, and. After 20 min of stimulation, participants undertook a modified dictator game that measured altruistic behaviour. Mixed-effect logistic regressions were applied to statistical analyses in this study. The results indicated that anodal tDCS over the rTPJ increased participants’ altruistic tendency by increasing their tendency to choose altruistic options in trials with higher cost, as well as their tendency to behave altruistically in situations of advantageous but not disadvantageous inequity. These results suggested that increased neural activity of the rTPJ leads to different impacts on altruism in these two different inequity situations.

Younger adults are more prosocial than older adults in economic decision making results from the give and take game

The present study was designed to investigate the disadvantageous and advantageous inequity aversion of young and older adults in situations which allowed them to maximize or minimize payoff inequalities. Given the very limited evidence regarding an actual age-related effect on inequity aversion, the purpose of this study was to examine this question using an economic game, “the Give-and-Take Game”, which is able to circumvent certain limitations of the Ultimatum Game, to evaluate inequity aversion (i.e., a same behaviour which can be induced by opposite motivations: prosocial vs. pro-self vs. altruistic orientations). In the “Give-and-Take Game”, a sum of money was randomly distributed between the participant and a dummy player. These distributions created monetary inequalities, advantageous either for the participant (to examine advantageous inequity aversion) or for the other player (to examine disadvantageous inequity aversion). Different response options were proposed to the participants to either maximize or minimize payoff inequalities between the players. This procedure not only allowed to differentiate individual’s profiles with more prosocial vs. pro-self vs. altruistic orientations, but also to examine age-related effects on these profiles. The results showed that older adults showed a more important pro-self orientation compared to their younger counterparts. They more frequently selected the options which maximized their own payoffs and were less averse to advantageous inequity compared to young adults. In contrast, young adults showed a similar level of advantageous and disadvantageous inequity aversion. Older adults focused on the economic and competitive dimension of the game, which may have motivated them to maximize their own payoffs. Conversely, young adults took into account the social dimension of the game, focusing on a fair monetary distribution.

Association between arginine vasopressin receptor 1A (AVPR1A) polymorphism and inequity aversion.

Although numerous studies have focused on brain functions related to inequity aversion, few have examined its genetic basis. Here, we show the association between estimated inequity aversion and polymorphisms in three genes associated with human sociality. Non-student adult participants took part in five economic game experiments on different days. Disadvantageous inequity aversion (DIA) and advantageous inequity aversion (AIA) were calculated from behavioural responses using Bayesian estimation. We investigated the association between genetic polymorphisms in the oxytocin receptor (OXTR rs53576), arginine vasopressin receptor 1A (AVPR1A RS3) and opioid receptor mu 1 (OPRM1 rs1799971) and inequity aversion. Regarding AVPR1A RS3, participants with the SS genotype had higher AIA than those with the SL or LL genotypes, but no association was found for DIA. Moreover, we observed no aversion associations for OXTR rs53576 or OPRM1 rs1799971. The results suggest that AVPR1A plays an important role in aversion when one's own gain is greater than that of others. Our findings may provide a solid theoretical basis for future studies on the relationship between genetic polymorphisms and inequity aversion.

Distinct role of the right temporoparietal junction in advantageous and disadvantageous inequity: A tDCS study.

Fairness is a hallmark of humans' ability to maintain cooperative relationships with large numbers of unrelated others. It influences many aspects of daily life, from how people share their resources with partners to how policymakers shape income distribution policy. The right temporoparietal junction (rTPJ) is a hub of the mentalizing network and it has been proposed to play a key role in guiding human reciprocal behavior; however, its precise functional contribution to fair behavior in situations of advantageous and disadvantageous inequity remains unclear. The purpose of this study was to clarify the role of the rTPJ in relation to fair behavior in situations of advantageous and disadvantageous inequity by modulating the activation of the rTPJ through transcranial direct current stimulation (tDCS). Anodal tDCS at 1.5 mA over the primary visual cortex (VC) or rTPJ was performed and participants subsequently played a binary-choice version of the Dictator Game. We found that anodal tDCS over the rTPJ increased the participants' equity choices in the disadvantageous inequity situation but not in the advantageous inequity situation. The tDCS effect is moderated by sex and, in particular, the tDCS effect increases female equity choices. The results suggest that the rTPJ plays a distinct role in inequity aversion in these two types of inequity situations.

Modulating the Activity of the Right Dorsolateral Prefrontal Cortex Alters Altruism in Situations of Advantageous Inequity

Altruism is highly valued and cherished by human society. However, human preferences and behavior are sensitive to inequality considerations. Currently, remarkably little is known about the neurobiological mechanisms underlying the process of altruistic acts in inequity situations. Therefore, to clarify the causal role of the right dorsolateral prefrontal cortex (rDLPFC) in altruism during situations of advantageous and disadvantageous inequity, we applied transcranial direct current stimulation (tDCS) to demonstrate the involvement of the rDLPFC in altruism in situations of inequity. A total of 71 participants (38 female and 33 male) received anodal tDCS at 1.5 mA over the rDLPFC (n = 38) or the primary visual cortex (n = 33) and subsequently participated in a modified dictator game that measures altruism. We found that anodal tDCS over the rDLPFC decreased subjects’ sensitivity to altruistic efficiency and cost in situations of advantageous inequity. Our results suggested that the rDLPFC plays an important role in overriding self-interest to enforce altruism in situations of advantageous inequity.

Distinct roles of the medial prefrontal cortex in advantageous and disadvantageous inequity aversion

Human beings have a strong preference for the fair distribution of resources in situations of both advantageous and disadvantageous inequity. Neuroimaging studies have shown that the process of advantageous and disadvantageous inequity aversion involves distinct brain regions. However, little is known about the causal roles of the dorsal medial prefrontal cortex (dmPFC) in these two types of inequity aversion. To clarify the roles of the dmPFC in both types of inequity aversion, 70 subjects were recruited and randomly assigned to two anodal transcranial direct current stimulation (tDCS) groups: tDCS over the dmPFC and tDCS over the primary visual cortex. Participants then completed a dictator game, which was used to measure the aversion to inequity. This study found that tDCS over the dmPFC decreased the aversion to disadvantageous inequity, but not that to advantageous inequity, and the treatment effect was modulated by equity cost. These results show that the dmPFC plays different roles in these two types of inequity aversion.

Green investment in a sustainable supply chain: The role of blockchain and fairness

We study a green investment problem of a sustainable supply chain with one manufacturer who decides whether to implement blockchain and one retailer who has emotional fairness concerns. Although blockchain adoption is costly, it can raise customers’ green sensitivity level and exempt a firm from environmental taxes. A fair-minded retailer cares about disadvantageous inequity in addition to monetary payoffs. We compare the supply chain performance with and without blockchain, each in combination with and without emotional fairness concerns. We show that the manufacturer has the incentive to adopt blockchain if the operational cost is below a certain threshold, and this threshold increases in both tax rate and the blockchain-driven increment in customers’ green sensitivity. We find that fairness can encourage blockchain implementation if and only if the blockchain-driven increment in customers’ green sensitivity level is nominal. Moreover, blockchain adoption may weaken the positive impact of fairness on the supply chain performance such as the mitigation of double marginalization and consumer welfare improvement. We also find that blockchain can encourage green investment and benefit the retailer only if the blockchain-driven increment in customers’ green sensitivity level is relatively high; that is, an “all-win” situation for the supply chain can be achieved by blockchain adoption. Extended studies on consumption-based emission taxes and blockchain setup cost are also provided.

Coordinating socially responsible supply chain with fairness via simple wholesale price contract

This paper investigates how fairness of retailer may affect the channel coordination of a dyadic supply chain comprising one manufacturer and one retailer, when the manufacturer exhibits CSR. Previous studies have shown that a manufacturer can achieve channel coordination (i.e., maximum channel profit and utility) with a simple wholesale price contract when the retailer is sufficiently fair (i.e., his disadvantageous inequity aversion is above a certain threshold value). However, this paper has been designed to examine whether the fairness sufficiency of retailer can be influenced by manufacturer's CSR activity. To this end, we mathematically formulate the manufacturer-led Stackelberg game theoretic framework, where the manufacturer exhibits CSR and the retailer is fairness concerned. We consider equitable payoff as the fairness reference to formulate the utility function of fair retailer. The paper adopts this approach because it captures the supply chain members' contributions and depends on the best external option available to each member. To obtain boundaries for the subgame perfect Nash equilibrium, we apply Karush-Kuhn-Tucker (KKT) conditions for constrained optimization. The results show that when the manufacturer exhibits CSR, the fairness concerned retailer will choose the channel coordinating price if his disadvantageous inequity aversion is above a further lower threshold value. Thus, the manufacturer's CSR can be helpful in moderating the retailer's fairness sufficiency to achieve channel coordination via simple wholesale price contract. For practical implications, it suggests that a fairness concerned retailer's aversion to inequitable profit distribution can be moderated by the manufacturer's CSR/welfare activities.

I am entitled to it! Social power and context modulate disadvantageous inequity aversion

Previous research consistently indicated that social power influences one's fairness consideration. However, it is unclear how social power and context jointly affect inequity aversion and whether these processes would be manifested in brain activities. In this study, participants were randomly assigned into either high or low power condition and then took part in a modified ultimatum game (UG) as responders in both gain and loss contexts, with their event-related potentials (ERPs) recorded. Behavioral results showed that powerful participants were more likely to reject unfair offers in both contexts compared with powerless ones. In addition, powerful participants showed a more negative feedback-related negativity (FRN) loss-win difference wave (d-FRN) upon presentation of proposed offers compared with powerless participants only in the gain context. Interestingly, in a later time window, differences of P300 responses to proposed offers were modulated by social power in both gain and loss contexts. These results suggested that powerful people were more sensitive to fairness levels and FRN may manifest fairness consideration in a gain context, but not in a loss context. Meanwhile, P300 is sensitive to fairness considerations in both gain and loss contexts.