Fairness Norms Research Articles

Fairness violations elicit greater punishment on behalf of another than for oneself.

Classic psychology and economic studies argue that punishment is the standard response to violations of fairness norms. Typically, individuals are presented with the option to punish the transgressor or not. However, such a narrow choice set may fail to capture stronger alternative preferences for restoring justice. Here we show, in contrast to the majority of findings on social punishment, that other forms of justice restoration (e.g., compensation to the victim) are strongly preferred to punitive measures. Furthermore, these alternative preferences for restoring justice depend on the perspective of the deciding agent. When people are the recipient of an unfair offer, they prefer to compensate themselves without seeking retribution, even when punishment is free. Yet when people observe a fairness violation targeted at another, they change their decision to the most punitive option. Together these findings indicate that humans prefer alternative forms of justice restoration to punishment alone.

Neural signatures of fairness-related normative decision making in the ultimatum game: a coordinate-based meta-analysis.

The willingness to incur personal costs to enforce prosocial norms represents a hallmark of human civilization. Although recent neuroscience studies have used the ultimatum game to understand the neuropsychological mechanisms that underlie the enforcement of fairness norms; however, a precise characterization of the neural systems underlying fairness-related norm enforcement remains elusive. In this study, we used a coordinate-based meta-analysis on functional magnetic resonance imaging (fMRI) studies using the ultimatum game with the goal to provide an additional level of evidence for the refinement of the underlying neural architecture of this human puzzling behavior. Our results demonstrated a convergence of reported activation foci in brain networks associated with psychological components of fairness-related normative decision making, presumably reflecting a reflexive and intuitive system (System 1) and a reflective and deliberate system (System 2). System 1 (anterior insula, ventromedial prefrontal cortex [PFC]) may be associated with the reflexive and intuitive responses to norm violations, representing a motivation to punish norm violators. Those intuitive responses conflict with economic self-interest, encoded in the dorsal anterior cingulate cortex (ACC), which may engage cognitive control from a reflective and deliberate System 2 to resolve the conflict by either suppressing (ventrolateral PFC, dorsomedial PFC, left dorsolateral PFC, and rostral ACC) the intuitive responses or over-riding self-interest (right dorsolateral PFC). Taken together, we suggest that fairness-related norm enforcement recruits an intuitive system for rapid evaluation of norm violations and a deliberate system for integrating both social norms and self-interest to regulate the intuitive system in favor of more flexible decision making.

Fairness Norms Can Explain the Emergence of Specific Cooperation Norms in the Battle of the Prisoner's Dilemma

Cooperation norms often emerge in situations, where the long term collective benefits help to overcome short run individual interests, for instance in repeated Prisoner's Dilemma (PD) situations. Often, however, there are different paths to cooperation, benefiting different kinds of actors to different degrees. This leads to payoff asymmetries even in the state of cooperation, and consequently can give rise to normative conflicts about which norms should be in place. This norm coordination problem will be modeled as a Battle of the Sexes game (BoS) with different degrees of asymmetry in payoffs. I combine the PD and the BoS to the 3 × 3 Battle of the Prisoner's Dilemma (BOPD) with several asymmetric cooperative and 1 noncooperative equilibria. Game theoretical and “behavioral” predictions are derived about the kind of norms that are likely to emerge under different shadows of the future and degrees of asymmetry and tested in a lab experiment. The experimental data show that game theory fairly well predicts the basic main effects of the experimental manipulations but “behavioral” predictions perform better in describing the equilibrium selection process of emerging norms.

Exploring disadvantageous inequality aversion in children: how cost and discrepancy influence decision-making.

This research examined disadvantageous inequality aversion in 4- and 6-year-old children. Using the resource allocation paradigm, we explored how inequality aversion was influenced by whether a cost was associated with the equitable choice. We also investigated whether preferences for equality differed depending on whether the inequitable choice presented a small or large discrepancy between the payoff of the participant and their partner. The results demonstrated that cost plays a large role in decision-making, as children preferred equality more when there was no cost associated with it compared to when there was a cost. Interestingly, the effect of cost also affected discrepancy, with children more likely to choose equality when the discrepancy was large as opposed to small, in cost trials but not in no cost trials. Finally, the effect of discrepancy also interacted with age, with older children being more sensitive to the discrepancy between themselves and their partner. Together, these results suggest that children’s behavior is not indiscriminately guided by a generalized aversion to inequality or established fairness norms. Alternate motives for inequality aversion are discussed.

Neural correlates of advantageous and disadvantageous inequity in sharing decisions.

Humans have a strong preference for fair distributions of resources. Neuroimaging studies have shown that being treated unfairly coincides with activation in brain regions involved in signaling conflict and negative affect. Less is known about neural responses involved in violating a fairness norm ourselves. Here, we investigated the neural patterns associated with inequity, where participants were asked to choose between an equal split of money and an unequal split that could either maximize their own (advantageous inequity) or another person’s (disadvantageous inequity) earnings. Choosing to divide money unequally, irrespective who benefited from the unequal distribution, was associated with activity in the dorsal anterior cingulate cortex, anterior insula and the dorsolateral prefrontal cortex. Inequity choices that maximized another person’s profits were further associated with activity in the ventral striatum and ventromedial prefrontal cortex. Taken together, our findings show evidence of a common neural pattern associated with both advantageous and disadvantageous inequity in sharing decisions and additional recruitment of neural circuitry previously linked to the computation of subjective value and reward when violating a fairness norm at the benefit of someone else.

The neural basis of perceived unfairness in economic exchanges.

Human decision making in situations of inequity has long been regarded as a competition between the sense of fairness and self-interest, primarily based on behavioral and neuroimaging studies of inequity that disfavor the actor while favoring others. Here, we use functional magnetic resonance imaging experiments to study refusals and protests using both favoring and disfavoring inequity in three economic exchange games with undercompensating, nearly equal, and overcompensating offers. Refusals of undercompensating offers recruited a heightened activity in the right dorsolateral prefrontal cortex (dlPFC). Accepting of overcompensating offers recruited significantly higher node activity in, and network activity among, the caudate, the cingulate cortex, and the thalamus. Protesting of undercompensating fixed offers activated the network consisting of the right dlPFC and the left ventrolateral prefrontal cortex and midbrain in the substantia nigra. These findings suggest that perceived fairness and social decisions are the results of coordination between evaluated fairness norms, self-interest, and reward.

Development of in-group favoritism in children’s third-party punishment of selfishness

When enforcing norms for cooperative behavior, human adults sometimes exhibit in-group bias. For example, third-party observers punish selfish behaviors committed by out-group members more harshly than similar behaviors committed by in-group members. Although evidence suggests that children begin to systematically punish selfish behavior around the age of 6 y, the development of in-group bias in their punishment remains unknown. Do children start off enforcing fairness norms impartially, or is norm enforcement biased from its emergence? How does bias change over development? Here, we created novel social groups in the laboratory and gave 6- and 8-year-olds the opportunity to engage in costly third-party punishment of selfish sharing behavior. We found that by age 6, punishment was already biased: Selfish resource allocations received more punishment when they were proposed by out-group members and when they disadvantaged in-group members. We also found that although costly punishment increased between ages 6 and 8, bias in punishment partially decreased. Although 8-y-olds also punished selfish out-group members more harshly, they were equally likely to punish on behalf of disadvantaged in-group and out-group members, perhaps reflecting efforts to enforce norms impartially. Taken together, our results suggest that norm enforcement is biased from its emergence, but that this bias can be partially overcome through developmental change.

Fairness norms and theory of mind in an ultimatum game: judgments, offers, and decisions in school-aged children.

The sensitivity to fairness undergoes relevant changes across development. Whether such changes depend on primary inequity aversion or on sensitivity to a social norm of fairness is still debated. Using a modified version of the Ultimatum Game that creates informational asymmetries between Proposer and Responder, a previous study showed that both perceptions of fairness and fair behavior depend upon normative expectations, i.e., beliefs about what others expect one should do in a specific situation. Individuals tend to comply with the norm when risking sanctions, but disregard the norm when violations are undetectable. Using the same methodology with children aged 8–10 years, the present study shows that children's beliefs and behaviors differ from what is observed in adults. Playing as Proposers, children show a self-serving bias only when there is a clear informational asymmetry. Playing as Responders, they show a remarkable discrepancy between their normative judgment about fair procedures (a coin toss to determine the offer) and their behavior (rejection of an unfair offer derived from the coin toss), supporting the existence of an outcome bias effect. Finally, our results reveal no influence of theory of mind on children's decision-making behavior.

Aging Populations and Management

The author considers societal and managerial challenges posted by an aging population. It mentions the aging population is motivating changes in how people are managed and will challenge social norms of equity and fairness. It comments many countries are examining the age at which people can utilize employer- and government-supported retirement funds as extended life expectancy means in theory older people can work longer, and considers the consequences of increasing the official retirement age.

Modularity and intellectual property protection

Modularity is a means of partitioning technical knowledge about a product or process. When state‐sanctioned intellectual property (IP) rights are ineffective or costly to enforce, modularity can be used to hide information and thus protect IP. We investigate the impact of modularity on IP protection by formally modeling the threat of expropriation by agents. The principal has three options to address this threat: trust, licensing, and paying agents to stay loyal. We show how the principal can influence the value of these options by modularizing the system and by hiring clans of agents, thus exploiting relationships among them. Extensions address screening and signaling in hiring, the effects of an imperfect legal system, and social norms of fairness. We illustrate our arguments with examples from practice.© 2014 The Authors. Strategic Management Journal published by John Wiley & Sons Ltd.

Conforming to Group Norms: An Experimental Study

There is substantial experimental and empirical evidence to suggest that individual behaviour in bilateral or small-group interactions is affected by social norms. Further, social norms vary according to context. Previous research largely focuses on norms of fairness, not norms per se. We design an experiment to decouple norm-adherence from fairness. We find that (a) a group norm evolves and individuals cluster more tightly around it as they learn the average behaviour of the group, (b) actions further from this norm in a self-serving direction are less acceptable by others, and (c) when an agent is moved to a group with a different norm, s/he conforms quickly to the new norm.

For Members Only

Although group membership has many privileges, members are expected to reciprocate those privileges. We tested whether in-group members would be punished more harshly than out-group members for marginal fairness norm violations within ultimatum game bargaining interactions. Participants considered monetary splits (of US$20) from in-group and out-group proposers, which ranged in proportion. Accepting an offer yielded the proposed payout; rejecting it caused each player to earn nothing—a punishment of the proposer at a personal cost. Participants exacted stricter costly punishment on racial in-group than out-group members for marginally unfair offers (Study 1), an effect that was replicated with college group membership and magnified among strong in-group identifiers (Study 2). Importantly, ultimatum game decisions were driven by fairness perceptions rather than proposer evaluations (Study 3), suggesting our effects reflected norm enforcement and not esteem preservation. These findings illuminate a previously unexplored process for maintaining group-based norms that may promote in-group favoritism.

Modularity and Intellectual Property Protection

Modularity is a means of partitioning technical knowledge about a product or process. When state-sanctioned intellectual property (IP) rights are ineffective or costly to enforce, modularity can be used to hide information and thus protect IP. We investigate the impact of modularity on IP protection by formally modeling the threat of expropriation by agents. The principal has three options to address this threat: trust, licensing, and paying agents to stay loyal. We show how the principal can influence the value of these options by modularizing the system and by hiring clans of agents, thus exploiting relationships among them. Extensions address screening and signaling in hiring, the effects of an imperfect legal system, and social norms of fairness. We illustrate our arguments with examples from practice.

Meritocratic sharing is based on collaboration in 3-year-olds.

The present study investigated young preschoolers' proportional allocation of rewards in 2 different work contexts. We presented 32 pairs of 3.5-year-old peers with a collaborative task to obtain rewards by pulling ropes. In order to establish differences in work input, 1 child's rope was not immediately accessible but had to be retrieved from the apparatus by means of a specific tool, while the other child had no such additional work to do. The result of the game was that 1 individual received 1 toy and the other received 3 toys. In the Deserving condition, the working child received the 3 toys (thus work and reward matched), whereas in the Undeserving condition, the other child received the 3 toys (he or she was overpaid, and the working child was underpaid). Another 32 dyads participated in a noncollaborative, parallel work task, again in a Deserving condition and an Undeserving condition. On average, children with 3 toys shared with their partner more in the Undeserving condition than in the Deserving condition after collaboration but not in a parallel work setup. These results suggest that young children take merit into account in distributing resources at a much younger age than previously believed and that peer collaboration is an especially facilitative context for children's attention to norms of fairness.

Private Standards of Fairness in European Contract Law

The Unfair Terms in Consumer Contracts Directive contains a general clause according to which ‘a contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations arising under the contract, to the detriment of the consumer’ (Article 3(1)). The open-textured nature of this clause requires further guidance as to what constitutes a significant imbalance contravening the principle of good faith. The question is whether self- and co-regulation of B2C contracts give rise to such guidance. This paper ascertains to what extent private or mixed standards are taken into consideration in the assessment of contract terms by civil judges. It depicts how private regulation flows into the judicial interpretation of the open fairness norm, especially in France (recommendations of the Commission des clauses abusives) and in the Netherlands (GTC agreed upon by both trade and consumer organisations). By taking this regulation into account while assessing the fairness of a contract term on the basis of a legal norm, civil courts confer legitimacy on it. It appears that private standards are deemed fair or viewed as a benchmark of fairness in view of their co-regulatory nature. Co-regulation however does not always vouch for in concreto and even in abstracto fair standards. It should therefore not exempt private standards from being put to a broader fairness review.

“I pick you”: the impact of fairness and race on infants’ selection of social partners

By 15 months of age infants are sensitive to violations of fairness norms as assessed via their enhanced visual attention to unfair versus fair outcomes in violation-of-expectation paradigms. The current study investigated whether 15-month-old infants select social partners on the basis of prior fair versus unfair behavior, and whether infants integrate social selections on the basis of fairness with the race of the distributors and recipients involved in the exchange. Experiment 1 demonstrated that after witnessing one adult distribute toys to two recipients fairly (2:2 distribution), and another adult distribute toys to two recipients unfairly (1:3 distribution), Caucasian infants selected fair over unfair distributors when both distributors were Caucasian; however, this preference was not present when the fair actor was Asian and the unfair actor was Caucasian. In Experiment 2, when fairness, the race of the distributor, and the race of the recipients were fully crossed, Caucasian infants’ social selections varied as a function of the race of the recipient advantaged by the unfair distributor. Specifically, infants were more likely to select the fair distributor when the unfair recipient advantaged the Asian (versus the Caucasian) recipient. These findings provide evidence that infants select social partners on the basis of prior fair behavior and that infants also take into account the race of distributors and recipients when making their social selections.

Incentives and Inhibitors of Abusing Academic Positions: Analysing University Students' Decisions about Bribing Academic Staff

In a web-based survey, we presented university students (n = 2,287) with vignettes in which they had to decide whether to abuse the position of student assistant for personal gain. Referring to the existing literature, we tested whether the emergence of corruption increases when benefits from corruption and the probability of the occurrence of those benefits rise and whether corruption decreases when costs and the probability of their occurrence increase. These four factors were varied within a factorial survey design. Moreover, social norms against corrupt practices were measured. We tested whether such norms reduce the willingness to commit these practices. Our study is the first to simultaneously scrutinize these influences of corruption in universities. The results suggest that students deliberate on the pros and cons of corrupt behaviour. Higher risks or costs of corrupt activities appear to be significant deterrents. Higher benefits or success probabilities increase the likelihood of engaging in corrupt activities. However, these factors are less important than the social norms against corruption. As a consequence, our results imply that curbing corruption by monitoring and sanctioning might be less effective than stimulating social norms against corruption or strengthening the validity of fairness norms.

The Fairness Norm in Social Decision-making: Behavioral and Neuroscience Studies

Widely regarded as a crucial topic in human society,fairness plays an important role in social decision-making.Economists and psychologists focus on discovering the motivational and cognitive mechanism underlying the fairness norm.Based on recent researches on fairness norm,three core models related to the fairness norms,namely inequity aversion,reciprocity,and emotion models,were summarized. Behavioral and neuroscience studies that are for or against these models were reviewed and compared. Specifically,the functions of those brain regions(the insula and the DLPFC)that are closely linked to social decision-making were discussed.Finally,the authors provided their opinions about future research.

Crying Over Spilt Milk: Sunk Costs, Fairness Norms and the Hold-up Problem

This article explores a possible connection between two behavioural anomalies in economics, the observed responsiveness of individual decision makers to sunk costs, and the apparent failure of backward induction to predict outcomes in experimental bargaining games. In particular, we show that under some conditions, a ‘sunk cost sensitive’ fairness norm can evolve in such environments. Under this norm, a fair distribution allows all parties to recoup whatever each has invested in their relationship before the net surplus is then divided into equal shares. The establishment of such a norm would have important consequences for the hold-up problem, which we characterize in terms of ultimatum bargaining in the presence of an outside option. We then conclude with a brief discussion of the possible labour market implications of our results.

Norm, network, and commons: The invisible hand of community

Abstract Formal models of collective action invariably presume individually rational actors and utility maximizing behavior. Ostrom reasoned that, if communities act to solve collective action problems, it is because of the strategic advantage of cooperative behavior in repeated game situations. In this article, we argue that, along with this logic, there are also instances when collective action arises out of other motivations – e.g., other-regard, tradition, empathy, and others that do not translate to individual rationality. Our new model formally depicts this using decision parameters that lie outside of individual utility and employs non-utilitarian decision logics – i.e., a vector payoff model that is more general than extant attempts at modeling other-regard. We review the literature that justifies this alternative model and illustrate it in real-world situations, such as recycling, that are better explained by the new model. The new model formally explains the power of non-community-like social networks in engendering collective action. In conclusion, we suggest that society is ridden with institutions that prevent people from acting upon intrinsic norms of fairness and empathy. In contrast, when we refashion institutional practices to increase recognition (i.e., identifiability of the recipients of one's actions), then we allow people to act in ways true to their authentic selves.