Biases in choices about fairness: Psychology and economic inequality

Abstract

This paper investigates choices about “distributional fairness” (sometimes called “distributive justice”), i.e., selection of the proper way for resources to be distributed in group. The study finds evidence that several of the same biases of risky decision making also apply to choices about distributional fairness, in particular focusing on the key biases that lead to prospect theory. This finding is achieved by introducing a novel thought experiment regarding the fairness of resource distributions, then manipulating the percentage of individuals who gain or lose in these distributions, and changing the sizes of gains and losses. Shared biases may mean similar heuristics are being employed. The mechanism behind this result leaves room for future exploration, as do the implications of the finding for related applications in inequality research.