Justice and Fairness

1
Justice and Fairness Karl Schurter Interdisciplina
ry Center for Economic Science
Treatments Unannounced Subjects were
simply told whether they were a Player A or B
upon completion of the instructions. This is the
basic form of the dictator game and serves as the
control. The typical distribution of offers from
Player As is bimodal at the theoretically
predicted outcome (e, 0) and the cooperative
outcome (.5e, .5e). The distribution is roughly
uniform in between. The average offer is between
20 and 30 of the endowment. Die Roll
Player A is randomly decided by a game of chance.
Immediately after all the players are ready to
begin, two buttons labeled Even and Odd
appear on their screens. Only one person from
each partnership is allowed to select each
option. After everyone has made a selection, the
experiment monitor rolls a six-sided die at the
front of the room and announces the result aloud
after asking on of the subjects to confirm. The
person in each pair who correctly guesses the
outcome becomes Player A. The purpose of this
treatment is to make the fair procedure more
prominent in the minds of the subjects.
Quiz The players take a trivia quiz containing
general questions about George Mason University
and its history. Their rank is based on their
scores on the quiz, with ties being decided by
giving the higher rank to the person who finished
the quiz first. Player As are the top ranking
half of the group and are paired with the lower
ranking half such that the highest ranking Player
A is matched with the lowest ranking Player B.
At no point do the subjects know their actual
rank. They only know if they are a Player A or
B. Seniority The players are ranked by
seniority based upon the credit hours they have
completed or are currently taking. For privacy
reasons, we do not ask the students to supply a
transcript. Instead, we ask them to volunteer
this information before they know what the
information will be used for so that they will
not be tempted to be dishonest. Player As are
the top ranking half of the group and are paired
with the lower ranking half such that the highest
ranking Player A is matched with the lowest
ranking Player B. At no point do the subjects
know their actual rank. They only know if they
are a Player A or B.
Methods Subjects Eighty-four George Mason
University undergraduate students were recruited
for an experiment in economic decision-making.
The subjects had never participated in an
extensive-form game before this experiment. They
were paid 7 at the door for showing up on time
and they were also paid according to their actual
income during the course of the experiment. The
experiment was single-blind. Procedure As
they entered the room, the subjects were given
their show up fee as they were seated at visually
isolated computer terminals. They then read a
set of on-screen instructions. At the end of the
instructions, they were asked to enter their name
and decide to leave or stay for the entire
experiment. In keeping with the idea of consent
to a social contract, they were not allowed to
change their minds later. Dictator Game The
subjects participated in a version of the
dictator game (DG). In the DG, there is first an
entitlement stage in which the subjects are
assigned to be either Player A or Player B.
Player A is then given an endowment, which he is
responsible for dividing between himself and his
counterpart, Player B. He may give any whole
number amount between zero and e, the size of the
endowment. Player B must accept Player As
allocation no matter what. This design allows
for insight into the subjects opinions regarding
their desert relative to their counterparts
without the confounding effects of bargaining or
some form of reciprocation. The entitlement
stage of the game varied across the four
treatments. After the entitlement stage, all the
subjects played the same dictator game with a 16
endowment.
Results The Unannounced, Die Roll,
Seniority, and Quiz treatments contained 20, 22,
22, and 22 pairs, respectively. Fig 1. contains
summary statistics from each treatment. Fig. 2-5
and Fig. 6 depict the offer distributions, both
as histograms and cumulative frequency
distributions. Fig. 7 summarizes the test
statistic and the critical value for each the
pair-wise Kolmogorov-Smirnov (KS) tests. The KS
test is a nonparametric distributions test, and
the distributions are statistically significant
if the test statistic is greater than or equal to
the critical value. However, because the sample
sizes are less than 25, there is less power to
test (samples are considered large when both
samples are greater than 25). The
Kruskal-Wallis one-way analysis of variance
showed that at least one treatment was different
from the others (p .022). The
Wilcoxon-Mann-Whitney medians test was used for
pair-wise comparisons between treatments. The
resulting p-values are summarized in Fig. 8.
Figure 3
Figure 2
Average Offer (percent of endowment) Median Offer (percent of endowment)
Unannounced 5.70 (35) 6.00
Die Roll 5.45 (34) 6.50
Quiz 3.77 (24) 3.50
Seniority 2.95 (18) 2.00
Figure 4
Figure 5
Figure 1
2
Abstract Justice and fairness are often
used interchangeably in current economic
research, but they carry distinct connotations.
Foreign languages borrow the word fair from the
english language for that reason. The common
phrase That is not fair translates to Das ist
nicht fair in German or To nie fair in Polish.
This research presents an empirical study that
tests the behavioral impacts of justice and
fairness on human subjects and attempts to answer
the question of whether they are, in fact,
different motivational forces in economic
decision-making. Results indicate that justice
derived from an individuals sense of greater
merit has a greater impact on decision-making.
Figure 6
Un. Die Roll Quiz Seniority
Unannounced 50 (176) 132 (176) 212 (176)
Die Roll   132 (198) 198 (198)
Quiz     88 (198)
Seniority      
one-tailed two-tailed
Figure 7
Background The most important component of
this experiment is a clear definition of terms.
The following definitions were based on modern
philosophical, political, and legal thinking
Justice, within the context of distributive
justice, is a hierarchical approach to an
allocation in which those with greater merit
receive proportionally more of the scarce
resource, i.e. everyone receives his or her just
desert. Fairness is egalitarianism.
The word fair connotes equity, and can refer to
equal reward or to equal opportunity. A
Fair Procedure is a method of establishing desert
that ensures equal opportunity. A previous study
with human subjects has shown that a fair
procedure that results in inequities is a
suitable alternative to equal reward, and vice
versa. Desert is a justifiable property
right, a claim to ownership of a resource that
has been validated by ones greater merit or by a
fair procedure.
Un. Die Roll Quiz Seniority
Unannounced   0.412 0.037 0.005
Die Roll     0.047 0.008
Quiz       0.277
Seniority        
one-tailed two-tailed
Figure 8
Conclusions Justice and fairness are
separate concepts in the minds of the subjects
when they are playing the dictator game.
Only justice gives good reason for offering less
of the initial endowment. It accounts for all
self-regarding behavior in the dictator game.
Fairness does not account for any self-regarding
behavior in the dictator game.