Fairness preferences in the face of limited information: Thomas de Haan
Thomas de Haan will present at DIGSSCORE Tuesday seminar.
Thomas de Haan, associate professor at the Department of Economics, University of Bergen, will present a research project:
Fairness preferences in the face of limited information
By Alexander Cappelen, Bertil Tungodden and Thomas de Haan
Abstract for the project:
Previous research on fairness preferences and inequality acceptance suggests that for many people the origin of inequality might matter. People seem to accept inequalities coming from differences in merit and performance more than inequalities due to luck. However one could expect that there are settings where it is unclear whether a certain outcome or achievement has been more because of luck, or because of merit. A question is how fairness preferences behave in such a limited information environment.
In this study we investigate the role of limited information regarding merit on fairness and equality preferences. In our setup 2 workers, recruited via Amazon Mturk, earn income by working on a real-effort task. The earned income levels of the workers differ but this is partly due to luck, partly due to differences in worker performances in the task. An impartial spectator recruited from an experiment run at the NHH, is then asked to decide how to allocate the total earned income by both workers and thus decides what level of inequality to implement.
We find that under full information, most spectators implement inequalities in a way that resembles a meritocratic fairness ideal, where inequalities should be due to effort, not due to luck. Theoretically we derive that we should expect less implemented inequality in the limited information treatment if spectators would follow a meritocratic principle. In our experiment we do not find less implemented inequality under limited information. We propose that spectator's bounded rationality regarding dealing with limited information crucially influences the fairness decisions in the experiment.
Lunch is served at first come, first served basis.