Justice and Fairness
Karl Schurter
Interdisciplinary Center for Economic Science
Fairness is not Just
Different connotations
 Fair derived from “fair play”
 “Das ist nicht fair”
 Fair implies equity

 Equal
opportunity
 Equal reward
The Philosophy of Justice
Retributive vs. Distributive
 Just desert based on merit
 How do we calculate desert?
 Veil of ignorance

Judging an Application
Reason alone does not deliver justice
 Criteria for desert
 Weight
 Achievement or potential

Assumptions of the Veil of Ignorance
There is only one just outcome
 Desert is calculable
 Not applicable to real problems
 Can be simulated in the laboratory

Procedural Justice
Clearly defined rules
 Informed consent
 Symmetric information
 Equal opportunity

Glossary
Justice: hierarchical approach to an
allocation
 Fairness: egalitarianism; “fair” connotes
equity
 Desert: justifiable property rights
 Merit: one basis of desert; a randomized
fair procedure (e.g. a coin flip) is another
basis of desert

Hypotheses
Justice and fairness are different
motivational factors
 They have different impacts on economic
decision-making

Experimental Design

Dictator Game
 Two
players: A and B
 Endowment, e, given each the pair
 Player A must unilaterally allocate the money


Average offer is 25% of the endowment
U-shaped distribution
 Bimodal

at (e, 0) and (.5e, .5e)
Informed consent
Property Rights
Player A has property rights
 Method of entitlement affects allocation
distribution

 Random
 Quiz
 Specialized
quiz
Treatments
Unannounced (Control)
 Die Roll
 George Mason trivia quiz
 Seniority

Unannounced
Computer pairs players
 Game starts immediately

Die Roll
Emphasize fair procedure
 Players choose even or odd after
instructions
 Whoever guessed correctly is Player A

George Mason Trivia Quiz
Quiz begins
 Quizzes are scored and ranked
 Top player is made a player A

 Paired

with last
Tie goes to the player who finished first
George Mason Trivia Quiz (Cont’d)
Confounds justice and fairness because it
involves merit
 Implications in other experimental
research

 Inequity
 Altruism
aversion
Seniority
Emphasize justice
 Ranked by credit hours as reported by the
subjects
 Draws on other campus privileges
(housing, parking, course selection, etc.)

Expected Results
Unannounced will include larger offers
than all other treatments
 Seniority will be different from dieRoll

Subjects
172 GMU undergraduates
 Recruited for “an experiment in economic
decision making”
 No previous experience in this type of
experiment
 20 pairs in unannounced, 22 pairs in
others

Results
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
Frequency
Unannounced
10
9
8
7
6
5
4
3
2
1
0
Female
Male
$0.00
$1.00 $2.00
$3.00
$4.00 $5.00
Offer
$6.00 $7.00
$8.00
Unannounced
Not the typical U-shape
 Social distance

 Single-blind
 Subjects
all in one room
 Social contract
 Computer run
Frequency
Die Roll
10
9
8
7
6
5
4
3
2
1
0
Female
Male
$0.00
$1.00
$2.00 $3.00
$4.00
Offer
$5.00 $6.00
$7.00
$8.00
Frequency
Quiz
10
9
8
7
6
5
4
3
2
1
0
Female
Male
$0.00
$1.00
$2.00 $3.00
$4.00
Offer
$5.00 $6.00
$7.00
$8.00
Frequency
Seniority
10
9
8
7
6
5
4
3
2
1
0
Female
Male
$0.00
$1.00 $2.00
$3.00
$4.00 $5.00
Offer
$6.00 $7.00
$8.00
Merit in Seniority vs. Quiz
Undergraduates know exact number of
credit hours in seniority
 Only know if they are A or B in quiz
 One-tailed Spearman’s Rank Coefficient
shows no effect of extra information
(rs=.086; critical-rs at .25 level = .236)

1
0.9
0.8
Cumulative Frequency
0.7
0.6
Unannounced
Die Roll
Quiz
Seniority
0.5
0.4
0.3
0.2
0.1
0
$0.00
$1.00
$2.00
$3.00
$4.00
Offer
$5.00
$6.00
$7.00
$8.00
Kolmogorov-Smirnov Test
Unannounced
Unannounced
Die Roll
Quiz
Die Roll
50 (176)*
Quiz
Seniority
132 (176)*
212 (176)*
132 (198)*
198 (198)**
88 (198)**
Seniority
*one-tailed
**two-tailed
Wilcoxon-Mann-Whitney Test
Unannounced Die Roll
Unannounced
Die Roll
Quiz
Quiz
0.412*
Seniority
0.037*
0.005*
0.047*
0.008**
0.277**
Seniority
*one-tailed
**two-tailed
Discussion

There are two distinct pairs:
 Quiz
and Seniority
 Unannounced and Die Roll

Merit is the common variable within the
pairs
Justice vs. Fairness
Justice and Fairness are separate
concepts in the minds of the subjects
during the dictator game
 Justice, not fairness, legitimizes the
property right of the endowment (keeping
more of it)

Appendix: Instructions
This is an experiment in economic decision making. Each of you will
be paired with another person in this room. One of you will be person A, and
the other will be person B. You will not be told who your counterpart is either
during or after the experiment, and he or she will not be told who you are
either during or after the experiment.
The experiment monitor has allocated $16 to each pair. An A will
decide how to divide the $16 between A and his or her counterpart B.
Notice that being an A is a definite advantage in this experiment.
[Unannounced]
[You will know if you are an A or a B once everyone finishes reading
the instructions.]
{Page Break}
[Die Roll]
[The positions of A and B will be determined by a roll of a die.
Everyone must click on one of the two buttons that are labeled Even and Odd.
The buttons will appear at the bottom right corner of your screen as soon as the
experiment begins. You will not be able to click on a button if your counterpart
has already clicked it.
The monitor will roll a 6-sided die at the front of the room and will
announce the result aloud. A roll of 1, 3 or 5 is Odd and a roll of 2, 4 or 6 is
Even. There is an equal chance of the roll being odd or even. The person in
each pair who called the actual roll of the die will be an A, and the other will be
a B.]
[Quiz]
[The positions of the A and B will be determined by ranking your
scores on a quiz on Mason trivia. Each of you will be asked the same set of
10 questions. The experiment monitor will rank the quiz scores with ties
decided by giving a higher ranking to the person who finishes the quiz in the
shortest amount of time. The lower ranking half will be the B’s, and the higher
ranking half the A’s. The highest ranked A will be matched with the lowest
ranked B, the second highest ranked A with the second lowest ranked B, etc.]
{Page Break}
[Seniority]
[The positions of A and B will be determined by seniority. The
experiment monitor will determine seniority by ranking the total number of credit
hours completed and in progress for each participant. Ties will be broken
randomly.
The lower ranking half will be the B’s, and the higher ranking half the
A’s. The highest ranked A will be matched with the lowest ranked B, the
second highest ranked A with the second lowest ranked B, etc.]
Each A will fill out a form on the computer that consists of the amount
that A will receive and the amount that B will receive. If you are an A, you will
type an amount in the box labeled “Your Earnings.” The amount that B
receives will immediately be shown in the box labeled “B’s Earnings.” Once an
A is satisfied with the decision, he or she must click the Submit button and
confirm the decision.
When all of the A’s have confirmed their decisions, the results will be
displayed to their counterparts. Payment will take place after the experiment,
and it will be private.
{Page Break}
If you are ready to begin and agree to continue under these rules,
please enter your name and click the button that says “I Agree.” If you do not
wish to continue, you may choose to leave now with your $7 for showing up on
time.
You may not leave after the experiment has begun.
If an odd number of people decide to leave, one more person will be
randomly selected to receive $16 and will be allowed to leave at this time, as
well.