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Abstract

When allocating resources, people often have to resolve a conflict between equity and efficiency concerns. That is, sometimes for everyone to receive the same amount of resources, some resources must be used suboptimally. However, it is unclear whether and how people account for the impact their allocation decisions would have on the recipients' outcome. In three experiments, we examine how the amount of resources allocated to the recipients influences allocators' decisions and use mouse tracking techniques to assess their conflict during the decision process. The results reveal that when an equitable allocation of resources led to neither recipients receiving anything nor imposed losses, people tended to prefer efficient allocations. Such allocations between recipients who may end up with no resources also evoke a greater conflict compared with allocations in which both recipients have some secured gains, suggesting that, in general, people want to be equitable but not when equity means that nobody gets anything. When maintaining equity can only be done by leaving recipients with no resources at all, equitable allocations evoke a greater conflict, and people are more likely to refrain from them.

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... Relatedly, when asked about their preferred resource distribution in their own society, people want resources to be distributed more equally than they are and favor fair and impartial allocations (Norton & Ariely, 2011; for a review see Starmans, Sheskin, & Bloom, 2017). People are even willing to incur personal costs and waste resources to prevent inequitable allocations among other parties (Choshen-Hillel, Shaw, & Caruso, 2015;Dawes, Fowler, Johnson, McElreath, & Smirnov, 2007;Gordon-Hecker, Schneider, Shalvi, & Bereby-Meyer, 2021;Mitchell, Tetlock, Mellers, & Ordonez, 1993;Shaw, Barakzai, & Keysar, 2019;Shaw & Knobe, 2013;Van den Bos, Peters, Bobocel, & Ybema, 2006; for a review see Gordon-Hecker, Choshen-Hillel, Shalvi, & Bereby-Meyer, 2017). ...
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... Many studies of behavior in strategic games used the so-called "mouse-lab" technique, where certain options or payoffs in the game were hidden behind boxes that the subject had to click on to observe the number. While this approach has yielded many useful observations (such as that in complex games individuals do not explore all possible options (Bigoni, 2010;Bigoni & Fort, 2013;Brocas, Carrillo, & Sachdeva, 2018;Brocas, Carrillo, Wang, & Camerer, 2014;Chen, Huang, & Wang, 2018;Costa-Gomes et al., 2001;Gordon-Hecker, Schneider, Shalvi, & Bereby-Meyer, 2020;Johnson et al., 2002)), some argue that the process of clicking is too invasive and costly for the participants (Glöckner & Betsch, 2008). Eye-tracking is not strongly affected by these considerations, since it is minimally invasive and does not require any additional actions from the subject. ...
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Originally published in 1975, Equality and Efficiency: The Big Tradeoff is a very personal work from one of the most important macroeconomists of the last hundred years. And this new edition includes “Further Thoughts on Equality and Efficiency,” a paper published by the author two years later. In classrooms Arthur M. Okun may be best remembered for Okun’s Law, but his lasting legacy is the respect and admiration he earned from economists, practitioners, and policymakers. Equality and Efficiency is the perfect embodiment of that legacy, valued both by professional economists and those readers with a keen interest in social policy. To his fellow economists, Okun presents messages, in the form of additional comments and select citations, in his footnotes. To all readers, Okun presents an engaging dual theme: The market needs a place, and the market needs to be kept in its place. As Okun puts it: Institutions in a capitalist democracy prod us to get ahead of our neighbors economically after telling us to stay in line socially. This double standard professes and pursues an egalitarian political and social system while simultaneously generating gaping disparities in economic well-being. Today, Okun’s dual theme feels incredibly prescient as we grapple with the hot-button topic of income inequality. In his foreword, Lawrence H. Summers declares: On what one might think of as questions of “economic philosophy,” I doubt that Okun has been improved on in the subsequent interval. His discussion of how societies rely on rights as well as markets should be required reading for all young economists who are enamored with market solutions to all problems.
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Two central principles that guide resource-allocation decisions are equity (providing equal pay for equal work) and efficiency (not wasting resources). When these two principles conflict with one another, people will often waste resources to avoid inequity. We suggest that people wish to avoid inequity not because they find it inherently unfair, but because they want to avoid the appearance of partiality associated with it. We explore one way to reduce waste by reducing the perceived partiality of inequitable allocations. Specifically, we hypothesize that people will be more likely to favor an efficient (albeit inequitable) allocation if it puts them in a disadvantaged position than if it puts others in a disadvantaged position. To test this hypothesis, we asked participants to choose between giving some extra resource to one person (thereby creating inequity between this person and equally deserving others) and not giving the resource to anyone (thereby wasting the resource). Six studies, using realistic scenarios and behavioral paradigms, provide robust evidence for a self-disadvantaging effect: Allocators were consistently more likely to create inequity to avoid wasting resources when the resulting inequity would put them at a relative disadvantage than when it would put others at a relative disadvantage. We further find that this self-disadvantaging effect is a direct result of people's concern about appearing partial. Our findings suggest the importance of impartiality even in distributive justice, thereby bridging a gap between the distributive and procedural justice literatures. (PsycINFO Database Record (c) 2015 APA, all rights reserved).
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In this chapter, we review and synthesize past research on want/should conflict. We begin with a formal definition of relative wants and shoulds and summarize prior work on the underlying cognitive processes that produce want/should conflict. We then describe empirical research on the levers that predictably tip the balance in favor of want versus should choices. In the final section of this chapter, we discuss a series of interventions that policymakers, organizations, and individuals can use to promote more future-oriented, should choices.
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Disagreements about the optimal level of wealth inequality underlie policy debates ranging from taxation to welfare. We attempt to insert the desires of "regular" Americans into these debates, by asking a nationally representative online panel to estimate the current distribution of wealth in the United States and to "build a better America" by constructing distributions with their ideal level of inequality. First, respondents dramatically underestimated the current level of wealth inequality. Second, respondents constructed ideal wealth distributions that were far more equitable than even their erroneously low estimates of the actual distribution. Most important from a policy perspective, we observed a surprising level of consensus: All demographic groups-even those not usually associated with wealth redistribution such as Republicans and the wealthy-desired a more equal distribution of wealth than the status quo. © The Author(s) 2011.
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Fairness concerns often prompt people to share equally, but the function of such equal sharing is somewhat unclear. Some researchers have proposed that fairness functions to promote generosity and reciprocity. I will review some recent data that contradict this view: Fairness can cause people to waste resources rather than be generous and can interfere with reciprocity. On the basis of these findings, I suggest an alternative view: Fairness functions to signal the fair individual’s impartiality to others. I discuss the predictions of this account and how these predictions might be tested in future research.
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There is growing, evidence that allocation decisions concerning burdens and benefits are not processed equivalently. This paper suggests three dimensions on which information processing for resource allocations differs: status quo effects (individuals react more strongly to losses in status quo than to gains), resource valence effects (individuals react more strongly to resource allocations involving burdens than those involving benefits), and blame effects (individuals react more strongly to resource allocation decisions in which they exercise choice). Results of an empirical study confirm significant differences in the information processing of burdens and benefits, and also confirm the importance of psychological distance in the reactions of individuals to burdens and benefits allocations.
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Game theory proposes that slack makes mean (noncooperative) games kinder (more cooperative) and kind (cooperative) games meaner (less cooperative), while scarcity produces the opposite effects. But, organizational situations generally involve mixtures of kindness (cooperation) and meanness (conflict). A 2 x 2 x 2 mixed motive decision-making experiment varied slack, certainty, and political influence. Results indicate that, when there is slack, kindness pays.
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Commodity theory (Brock, 1968) deals with the psychological effects of scarcity. According to the theory, scarcity enhances the value (or desirability) of anything that can be possessed, is useful to its possessor, and is transferable from one person to another. This article introduces commodity theory to the marketing literature, reports a meta-analysis of studies designed to test the theory, and discusses the marketing implications of the theory along with suggestions for future marketing research.
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Choice often produces conflict. This notion, however, plays no role in classical decision theory, in which each alternative is assigned a value, and the decision maker selects from every choice set the option with the highest value. We contrast this principle of value maximization with the hypothesis that the option to delay choice or seek new alternatives is more likely to be selected when conflict is high than when it is low. This hypothesis is supported by several studies showing that the tendency to defer decision, search for new alternatives, or choose the default option can be increased when the offered set is enlarged or improved, contrary to the principle of value maximization.
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The target article convincingly argues that mutualistic cooperation is supported by partner choice. However, we will suggest that mutualistic cooperation is not the basis of fairness; instead, fairness is based on impartiality. In support of this view, we show that adults are willing to destroy others' resources to avoid inequality, a result predicted by impartiality but not by mutualistic cooperation.
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In recent studies of the structure of affect, positive and negative affect have consistently emerged as two dominant and relatively independent dimensions. A number of mood scales have been created to measure these factors; however, many existing measures are inadequate, showing low reliability or poor convergent or discriminant validity. To fill the need for reliable and valid Positive Affect and Negative Affect scales that are also brief and easy to administer, we developed two 10-item mood scales that comprise the Positive and Negative Affect Schedule (PANAS). The scales are shown to be highly internally consistent, largely uncorrelated, and stable at appropriate levels over a 2-month time period. Normative data and factorial and external evidence of convergent and discriminant validity for the scales are also presented. (PsycINFO Database Record (c) 2010 APA, all rights reserved)
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Subjects are reluctant to vaccinate a (hypothetical) child when the vaccination itself can cause death, even when this is much less likely than death from the disease prevented. This effect is even greater when there is a ‘risk group’ for death (with its overall probability held constant), even though the test for membership in the risk group is unavailable. This effect cannot be explained in terms of a tendency to assume that the child is in the risk group. A risk group for death from the disease has no effect on reluctance to vaccinate. The reluctance is an example of omission bias (Spranca, Minsk & Baron, in press), an overgeneralization of a distinction between commissions and omissions to a case in which it is irrelevant. Likewise, it would ordinarily be prudent to find out whether a child is in a risk group before acting, but in this case it is impossible, so knowledge of the existence of the risk group is irrelevant. The risk-group effect is consistent with Frisch & Baron's (1988) interpretation of ambiguity.
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The concept of justice is discussed, and the thesis is advanced that “equity” is only one of the many values which may underlie a given system of justice. Hypotheses about the conditions which determine which values will be employed as the basis of distributive justice in a group are proposed, with discussion centered about the values of “equity,” “equality,” and “need” and the conditions which lead a group to emphasize one rather than another value.
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When faced with a choice of selecting one of several available products (or possibly buying nothing), according to standard theoretical perspectives, people will choose the option with the highest cost–benefit difference. However, we propose that decisions about free (zero price) products differ, in that people do not simply subtract costs from benefits but instead they perceive the benefits associated with free products as higher. We test this proposal by contrasting demand for two products across conditions that maintain the price difference between the goods, but vary the prices such that the cheaper good in the set is priced at either a low positive or zero price. In contrast with a standard cost–benefit perspective, in the zero-price condition, dramatically more participants choose the cheaper option, whereas dramatically fewer participants choose the more expensive option. Thus, people appear to act as if zero pricing of a good not only decreases its cost, but also adds to its benefits. After documenting this basic effect, we propose and test several psychological antecedents of the effect, including social norms, mapping difficulty, and affect. Affect emerges as the most likely account for the effect.
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The transplant system has been criticized for not paying enough attention to efficiency in distributing scarce organs. But little research has been done to see how the general public views tradeoffs between efficiency and equity. We surveyed members of the general public to see how they would distribute organs among patients with varying chances of benefiting from them. In addition, we asked subjects to explain their decisions and to tell us about any other information they would have liked in order to make the decisions. We found that the public places a very high value on giving everyone a chance at receiving scarce resources, even if that means a significant decrease in the chance that available organs will save people's lives. Our results raise important questions about whether the aims of outcomes research and cost-effective studies agree with the values of the general public.
Article
This laboratory study investigates negotiated allocations of benefits and burdens. We compare both the distributive and integrative aspects of negotiation to determine whether benefits and burdens are allocated according to the same norms of distributive justice and how well negotiators integrate their interests. We hypothesize that the distribution of resources depends on the valence of the resources and negotiators′ relative contributions to those resources. We also expect that the efficiency of agreements depends on the valence of resources, the negotiators′ contributions, and the time horizon of their relationships. Results support the hypotheses. Equity is more commonly used to allocate burdens than benefits; agreements for allocating burdens are less integrative than those for benefits; and agreements are more efficient when relationships are long term and subjects contribute unequally to the resources being allocated than when they contribute equally or relationships are short term. We discuss these results in terms of Taylor′s (1991) hypothesis about the asymmetrical effects of positive and negative events.
Article
Individuals′ concerns with entitlements and fairness are important in determining outcomes of negotiations. This paper examines the effects of organizational culture and resource valence on the decision rules individuals enact in creating fair resource allocations. It was hypothesized that organizational culture (economically oriented, relationship-oriented, or personal development-oriented) would determine which distribution principle (equity, equality, or need) group members would use to allocate resources. Valence of the resources also was predicted to influence allocation decision and processes. Participants role-played the negotiation of resource allocations across three divisions of a company. Results generally supported the hypothesized links between culture and the resource distribution used by the principles. Significant differences also were found between the allocation of positively valenced and negatively valenced resources.
Article
Two experiments tested predictions derived from a contingency model of distributive justice that identifies four interrelated categories of determinants of people's allocation decisions: (1) abstract distributive norms; (2) perceived attributes of claimants; (3) resource constraints; and (4) attributes of judges. The model posits that allocations of public resources (e.g., health care or welfare) engage in two types of appraisal: one focused on the adequacy of the resource pool, and the other on the causes of claimants' needs. When resources are inadequate, attributional analysis assumes central importance, and need and efficiency emerge as key distributive values. If claims arise from internal-controllable causes, allocators experience anger toward claimants, devalue their deservingness, and withhold resources. If claims arise from other causes, distributive norms become direct predictors of deservingness and allocation. The experiments manipulated the causes of need, the severity of need, and the likelihood of effective assistance under low and high scarcity (Study I) and no scarcity (Study II). Under scarcity, allocators were much more likely to deny aid to claimants who were responsible for their predicament. Need and efficiency emerged as joint predictors of allocating aid to claimants who were not responsible for their predicament. Politically conservative allocators withheld resources from those personally responsible for their needs regardless of both severity of need and likelihood of effective helping, even when there were sufficient resources to satisfy all claimants, whereas liberals tended to provide resources to all claimants.
Article
The question raised in this paper is whether goal conflicts can occur outside of conscious awareness. Given the numerous and potentially conflicting goals people pursue, and the severe scarcity of mental resources, we offer a positive answer. Six experiments that employed a dissociation paradigm tested this hypothesis. Using three implicit behavioral markers of goal conflict (increased decision times, increased decision variance and heightened sensitivity to environmental information), and one physiological marker (increased arousal as measured by skin conductance level), these experiments document goal conflicts that do not reach conscious awareness.
Article
The economic theory of the consumer is a combination of positive and normative theories. Since it is based on a rational maximizing model it describes how consumers should choose, but it is alleged to also describe how they do choose. This paper argues that in certain well-defined situations many consumers act in a manner that is inconsistent with economic theory. In these situations economic theory will make systematic errors in predicting behavior. Kanneman and Tversey's prospect theory is proposed as the basis for an alternative descriptive theory. Topics discussed are: undeweighting of opportunity costs, failure to ignore sunk costs, scarch behavior choosing not to choose and regret, and precommitment and self-control.