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The Malleability of Inequality Trade-Offs

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This chapter provides a general review of the research conducted over the past two decades on individuals’ conceptions of equity and distributive justice and their reactions to inequity. Various theoretical formulations are identified and important topics for further theoretical development and empirical investigation are discussed. In conclusion, the authors suggest that micro-level concepts of distributive justice have certain limitations. Consideration of more macrolevel concepts suggests possibilities for integrating equity and distributive justice theories with sociological theories of power, conflict, and collective action. This integration, if achieved, would bring notions of justice to the forefront in the analysis of social change.
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357 undergraduates were Ss in 3 experiments in which a sizable minority of Ss asked to allocate final outcomes of a group effort as fairly as possible assigned each participant an equal share, regardless of differential contributions. On the other hand, Ss asked instead to allocate shares of the expenses (i.e., the difference between contribution and final outcome) as fairly as possible tended to assign equal shares of the expenses, even though this implied different final outcomes. No S allocated expenses in such a way as to achieve equal final outcomes. Although the relevance of this "phrasing effect" to equity theory and the limits of its generalizability are arguable, it clearly represents a variable with biasing effects on practical allocation problems that need to be considered. (23 ref) (PsycINFO Database Record (c) 2012 APA, all rights reserved)
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A central issue in theories of social justice is the potential conflict between equality and efficiency in the distribution of resources. We suggest here that resource priority is a key factor that moderates the perceived fairness of equality/efficiency compromises in resource allocation. Participants were presented with scenarios involving a policy change that pitted equality against economic efficiency in the allocation of a variety of resources that differed in their importance levels (basic versus non-basic). We found that participants gave more weight to efficiency considerations at the expense of equality in distributing non-basic (higher-level) resources than in distributing basic resources. We discuss the priority hypothesis in connection with norms of justice, human motives, the need hierarchy (deficiency versus growth needs), the consumption of basic versus non-basic resources, and the legitimacy of allocation policies.
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An attempt is made to evaluate the performance of several distribution mechanisms, using experimental data on ethical judgements. Among the mechanisms examined are the competitive equilibrium with equal incomes, utilitarianism, the maximin, and several mechanisms based on bargaining. Also studied is the extent to which differences in needs, in tastes, and in beliefs may account for unequal distribution.
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Chapter
George Loewenstein is one of the pioneers of the rapidly growing field of behavioral economics. For over twenty years he has been working at the intersection of economics and psychology and is one of the few people of whom it can be said that their work is equally respected and well known within both disciplines. This book brings together a selection of his papers focusing on what he calls “exotic preferences”-- the disparate motives that drive human behavior. In addition to covering the history and methodology of behavioral economics, they also touch on a wide range of fascinating topics such as the motives that drive extreme athletes, our propensity to want to get unpleasant experiences out of the way so we can focus on the more pleasant, and the psychology of curiosity. There are also papers on social preferences, discussing the importance of perceptions of fairness in interpersonal interactions, intertemporal choice-- the tradeoffs between costs and benefits occurring at different points in time-- and the impact of emotion on economic decision making. An original introduction outlines Loewenstein's general approach to research, and there are short introductions to each paper outlining briefly when, how and why they came to be written, providing a fascinating and vivid insight into the process of intellectual creativity.
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Chapter
This handbook is currently in development, with individual articles publishing online in advance of print publication. At this time, we cannot add information about unpublished articles in this handbook, however the table of contents will continue to grow as additional articles pass through the review process and are added to the site. Please note that the online publication date for this handbook is the date that the first article in the title was published online. For more information, please read the site FAQs.
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This book, which was first published in 1973, presents a systematic treatment of the conceptual framework as well as the practical problems of the measurement of economic inequality. Alternative approaches are evaluated in terms of their philosophical assumptions, economic content, and statistical requirements. In a new annexe added in 1997, which is as large as the original book, Amartya Sen, jointly with James Foster, critically surveys the literature that followed the publication of the first edition of the book, and evaluates the main analytical issues in the appraisal of economic inequality and poverty. The technical and non‐technical sections of the book are not presented separately, but it is possible to skip or skim through the formal sections and go directly from the intuitive presentation of the axioms to the intuitive explanation of the results.
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Nature Reviews Psychology. You can read the paper here: https://rdcu.be/cJ0Kj ------------------------------------------------------------------------------------------------------------------------------------------- Economic inequality might influence subjective wellbeing through psychological processes such as status competition and social distance. However, evidence for this claim is mixed. In this Perspective, we suggest that inconsistent findings arise because the psychological effects of economic inequality are driven by perceived—rather than objective—inequality. Perceived inequality is not always related to objective inequality for at least three reasons. First, unequal societies tend to be more physically and psychologically segregated, so, paradoxically, people have less contact with inequality in these societies. Second, people are more influenced by signs of economic disparities in their daily life and close circles than by information about inequality at an abstract level. Third, system-justifying ideologies lead people to perceive more or less inequality relative to objective inequality. We conclude that perceived inequality is crucial for understanding how and when objective inequality influences psychological processes and individual outcomes.
Chapter
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Justice, equity, and fairness are central concerns of everyday life, whether we are assessing the fairness of individual acts, social programmes, or institutional policies. This book explores how the distribution of costs and benefits determine our intuition about fairness and why individual behaviour sometimes deviates from normative theories of justice. To make any comparison, one must first state how fair distributions of resources or burdens should be made. Here, competing theories, such as utilitarianism and economic efficiency, are discussed. The chapters cover many topics including an investigation of various rules and heuristics that people use to make fair distributions; the motivation for people to conform to rules of fairness even when they conflict with self-interest; differences between the views of liberals and conservatives; societal rules for the distribution or allocation of critical or scarce resources; and implications for public policy. This mixture of theoretical and applied perspectives provides a balanced look at the psychology of justice.
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This chapter provides an overview of the interplay between social comparison and competition before, during, and after the competition. Competition is defined broadly to include an act or process of competition, explicit or implicit, linked to basic social comparison processes. Before the competition , the authors consider the lessons of the social comparison literature on motives, individual differences, cultural and social norms, and competition entry decisions. The authors then review relevant findings on the role of individual factors (personal and relational) as well as situational factors that affect motivation and competitive behavior during the competition . Finally, the chapter examines the social comparison literature on downward comparison, upward comparison, and competition re-entry decisions after the competition .
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Drawing on the author's work, this lecture presents evidence on U.S. income and wealth inequality. It presents series for top income and wealth shares, and the distribution of economic growth by income groups. It discusses the mechanisms behind the evolution of U.S. income and wealth inequality from historical and comparative perspectives. It analyzes the role of public policy and in particular taxation in the evolution of inequality. (JEL D31, F66, J24)
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Economic inequality is one of the most divisive issues of our time. Yet few would argue that inequality is a greater evil than poverty. The poor suffer because they don't have enough, not because others have more, and some have far too much. So why do many people appear to be more distressed by the rich than by the poor? In this provocative book, the #1 New York Times bestselling author of On Bullshit presents a compelling and unsettling response to those who believe that the goal of social justice should be economic equality or less inequality. Harry Frankfurt, one of the most influential moral philosophers in the world, argues that we are morally obligated to eliminate poverty-not achieve equality or reduce inequality. Our focus should be on making sure everyone has a sufficient amount to live a decent life. To focus instead on inequality is distracting and alienating. At the same time, Frankfurt argues that the conjunction of vast wealth and poverty is offensive. If we dedicate ourselves to making sure everyone has enough, we may reduce inequality as a side effect. But it's essential to see that the ultimate goal of justice is to end poverty, not inequality. A serious challenge to cherished beliefs on both the political left and right, On Inequality promises to have a profound impact on one of the great debates of our time.
Chapter
Most work on the psychology of justice has failed to state explicitly, let alone justify, its underlying definitional assumptions. This failure has inevitably led to conceptual confusion and to inconsistent use of terminology. The definition adopted in this chapter is that justice involves an evaluative judgment about the moral rightness of a person’s fate: that is, a person’s treatment by others (including nonhuman forces) is judged to be just if it corresponds to some standard or criterion of what is morally right.1 Some psychologists have implicitly assumed more restricted definitions of justice, such as the objective and impartial treatment of persons (i. e., fairness). This definition limits the concept of justice to an evaluative judgment of how people should be treated only when there are competing claims and conflicts of interest. In my view, such a restriction places undue emphasis on scarcity and competition in human interaction, an emphasis that is pervasive but also distorting (see Gross & Averill, 1983). I am assuming that justice refers not only to fair treatment but also to respect for the needs and rights inherent in human nature—an assumption that is shared by some (e. g., Adler, 1981) but not by all (see Buchanan & Mathieu, Chapter 2, this volume). Justice is usually said to exist when people receive what they are due, and they are due not only fairness but treatment consistent with their natural rights as human beings. When discussing other authors who have defined justice more narrowly, I have placed single quotation marks around the word justice in order to distinguish their usage from my own.
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The process of exchange is almost continual in human interactions, and appears to have characteristics peculiar to itself, and to generate affect, motivation, and behavior that cannot be predicted unless exchange processes are understood. This chapter describes two major concepts relating to the perception of justice and injustice; the concept of relative deprivation and the complementary concept of relative gratification. All dissatisfaction and low morale are related to a person's suffering injustice in social exchanges. However, a significant portion of cases can be usefully explained by invoking injustice as an explanatory concept. In the theory of inequity, both the antecedents and consequences of perceived injustice have been stated in terms that permit quite specific predictions to be made about the behavior of persons entering social exchanges. Relative deprivation and distributive justice, as theoretical concepts, specify some of the conditions that arouse perceptions of injustice and complementarily, the conditions that lead men to feel that their relations with others are just. The need for much additional research notwithstanding, the theoretical analyses that have been made of injustice in social exchanges should result not only in a better general understanding of the phenomenon, but should lead to a degree of social control not previously possible. The experience of injustice need not be an accepted fact of life.
Article
Social comparison-the tendency to self-evaluate by comparing ourselves to others-is an important source of competitive behavior. We propose a new model that distinguishes between individual and situational factors that increase social comparison and thus lead to a range of competitive attitudes and behavior. Individual factors are those that vary from person to person: the relevance of the performance dimension, the similarity of rivals, and their relationship closeness to the individual, as well as the various individual differences variables relating to social comparison more generally. Situational factors, conversely, are those factors on the social comparison landscape that affect similarly situated individuals: proximity to a standard (i.e., near the number 1 ranking vs. far away), the number of competitors (i.e., few vs. many), social category fault lines (i.e., disputes across vs. within social categories), and more. The distinction between individual and situational factors also helps chart future directions for social comparison research and generates new vistas across psychology and related disciplines. © The Author(s) 2013.
Article
Structural explanations of the production of inequality in organizations often mimic economics in their choice of both variables and theoretical accounts. The "new structuralism" typically has neglected important social psychological processes such as social comparison, categorization, and interpersonal attraction and affiliation. This paper illustrates how some basic social psychological tenets can substantially enrich the analysis of the division of labor in organizations, the assignment of wages to positions, and the process through which individuals are matched with work roles.
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This paper explores several issues of distributive justice as they are represented in the thinking practices of managers. The particular focus is on the contrast between equity- and parity-based distribution logics, how these are likely to be affected by different value contexts and by personal philosophies of managing, and how justice-related concerns fit into the way managers are likely to approach allocation problems. Empirical data gathered from a sample of practicing managers concerning their preferences and reactions to standardized allocation problems indicated that managers are flexible in their use of equity-and parity-based logics and that their concerns about fairness are closely connected to other value considerations. The implications for a more expansive view of justice in workplace are discussed.
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Data from 1,805 academic departments in 303 colleges and universities were used to examine the effect of the organization of work on wage variation within departments. Private control, larger departmental size, and a greater tendency to work alone were all associated with more dispersed wages; more social contact among departmental members, more democratic and participative departmental governance, and more demographic homogeneity were associated with more equal salary distributions. The results are consistent with social psychological theories of reward allocation that have emphasized the importance of norms, social contact, and social relations as critical factors in the allocation process.
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We know that being around more successful others can threaten positive self-views and self-esteem. We also know that people are motivated to maintain high self-esteem. The present article outlines how threats to self-views, created by upward comparisons to more successful others, motivate and influence behavioral responses. In particular, it suggests that the degree to which subsequent performance situations provide an opportunity to repair threatened self-views determine whether responses are positive or negative. When performance tasks provide an opportunity to repair self-views, and repair seems likely, positive responses such as increased performance are likely to occur. When performance tasks do not provide an opportunity and repair seems unlikely, negative responses such as undermining others and withdrawing effort are likely to occur. Theoretical and practical implications, as well as future directions are discussed.
Article
This chapter discusses “deserving” and “emergence” of the theme of justice. The related themes of justice and deserving pervade the entire fabric of a society. The evidence for the importance of the theme of justice in a society can be strikingly juxtaposed against the equally vivid signs of institutionalized injustice and widespread indifference to the fate of innocent victims. Although various theorists have treated the definition in a conceptually more systematic way, “deserving” refers essentially to the relation between a person and his outcomes. A person deserves an outcome if he has met the appropriate “preconditions” for obtaining it. If a person does not get the outcome or gets something judged to be of less value, then he has not received all he deserved. Of course, the outcomes in question can be negative rather than positive in nature. The chapter approaches the more substantive issue of the extent to which people care about justice and the way these concerns affect their lives. It examines the question of why people care at all about justice and deserving. One possibility is suggested by a consideration of a developmental sequence, particularly the transition from living by the “pleasure” principle to living by the “reality” principle. The chapter highlights the development of the “personal contract”, altruism, and forms of justice.
Article
This paper identifies a systematic instability in the weight that people place on interpersonal comparisons of outcomes. When evaluating the desirability of a single outcome consisting of a payoff for oneself and another person, people display great concern for relative payoffs. However, when they choose between two or more outcomes, their choices reflect greater concern with their own payoffs and less concern for relative payoffs. Modal subjects in our experiments rated the outcome of 500forself/500 for self/500 for other as more desirable than the outcome 600forself/600 for self/800 for other when both were evaluated independently, but they chose the latter outcome over the former when presented with the two options simultaneously. We offer a theoretical explanation for this phenomenon and demonstrate its robustness.
Article
Studied the effects of reward magnitude and comparability of the outgroup on minimal intergroup discrimination where self-interest was related to ingroup profit. Favouritism towards own group is hypothesized to arise from intergroup comparisons to enhance self-esteem as well as instrumental rivalry for group and self-interest. Sixty-two fourteen to fifteen years' old school-boys and girls were randomly assigned to a high or low reward condition in which they distributed monetary rewards, via choice-matrices, to the ingroup and a relevant comparison outgroup, and the ingroup and an irrelevant comparison outgroup. Monetary self-interest was explicitly and directly linked to ingroup's absolute profit. Ss sacrificed group and personal gain to achieve intergroup differences in monetary outcomes favouring the ingroup; and were less fair and more discriminatory towards the relevant than irrelevant outgroup. especially with High Rewards.
Article
Exchange theorists assume that equitable sharing is normative in all interpersonal exchanges. However, it was reasoned that one's definition of the relationship is a major factor in determining how people share. Subjects (N = 140) assigned to either a cohesive or noncohesive condition and paired with an opposite-sex confederate partner were asked to share a $7 reward after being required to contribute more inputs to an enterprise than their partners. Those in the cohesive relationship shared equally even after contributing more inputs; those not cohesively bonded did not. Only partial support was received for the hypothesis that subjects with high prosocial orientation would not differ in sharing in the cohesive condition but would share equally in the noncohesive condition more frequently than their low prosocial counterparts.
Article
examine the concept of equality or equal division as a heuristic that is used to facilitate decision making in situations involving allocation of goods and bads / the kinds of situations that I have in mind involve two or more people who must share resources, responsibilities, or liabilities / the focus . . . is the individual cognitive processes involved when a person must make a decision about how some resource or cost should be allocated / propose that the idea of equality has properties that make it a useful guideline or benchmark in making allocation decisions / it will become obvious that the use of equality as a decision heuristic does not imply that such decisions are simpleminded or uninteresting / on the contrary, they can be quite intricate (PsycINFO Database Record (c) 2012 APA, all rights reserved)
Article
present interview data from a field study that suggests that very different principles may be used by the same individual to calculate deservingness at the workplace and at home / suggestion that the concept of derservingness not only varies in character between different social contexts, but may also vary in its accessibility across settings sample of corporate managers / to the extent that any principle was articulated in the home setting, it tended to be need rather than equity in their discussion of conditions that could encourage or discourage the use of deservingness principles in various contexts, the authors emphasize the availability of appropriate targets for social comparison / social justice (PsycINFO Database Record (c) 2012 APA, all rights reserved)
Article
Six studies explored the hypothesis that third parties are averse to resolving preference disputes with winner-take-all solutions when disputing factions belong to different social categories (e.g., gender, nationality, firms, etc.). Studies 1-3 provided empirical support for the claim that third parties' aversion to winner-take-all solutions, even when they are based on the unbiased toss of a coin, is greater when the disputed preferences correlate with social category membership. Studies 4-6 suggested that reluctance to resolve inter-category disputes in a winner-take-all manner is motivated by a desire to minimize the affective disparity - the hedonic gap - between the winning and losing sides. The implication is that winner-take-all outcomes, even those that satisfy conditions of procedural fairness, become unacceptable when disputed preferences cleave along social category lines.
Article
A critical reexamination of the equity theory conception of justice is presented; the alternative, justice as equality, is introduced and examined, utilizing both theoretical and empirical materials to develop the argument. The implications of these two alternate perspectives on justice are examined with emphasis on the sociohistorical roots and present support for what is presumably a psychological principle i.e., equity is the natural preferred state of human relationships. The role of social psychological research and theory in contributing to the existing system of support for the equity conception is noted, as is the potential value that derives from a serious consideration of conditions conducive to the alternative conception of relationships as based on equity.
Article
This study tested the hypothesis that in situations, incorporating demands for opposing allocation rules, people will only compromise between the relevant rules if the allocational computation is fairly simple. Male secondary-school pupils were given a description of one of three situations (an unambiguous equality, an unambiguous equity or an ambiguous equality and equity situation), and they were then asked to divide 100 units of reward over four persons in easy or in complex computation circumstances. Instead of the expected interaction between situational ambiguity and complexity the results showed a computational complexity main effect: compromising decreased with complexity. In addition, in the ambiguous conditions, the proportion of equitable distributions was greater in the simple and smaller in the complex condition than the proportion of equal distributions. It was concluded that greater computational complexity not only decreases the amount of compromising, but also induces a preference for equality over equity allocations, if situational demands for equity are not too strong. Both are considered expressions of the same tendency to switch to computationally easier allocations, as allocation computations become more complex.
Article
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.
Article
There are three generic problems that arise in the use of the concept of equality as a principle of fairness. These problems concern (i) determining when equality is appropriate as opposed to some other principle, (ii) deciding how equality is to be operationalized, and (iii) determining how to implement equality. The proposal is made that these intrapersonal decision conflicts are mirrored by social conflicts when multiple interests are involved. This way of looking at social conflicts also suggests some novel ways to approach conflict resolution.
Article
Two studies examined the effect of two comparison processes on perceptions of fairness and satisfaction. Rewards relative to others (social comparison) and relative to expectancies (expectancy comparison) were orthogonally varied while absolute level of reward was held constant. Both studies showed, contrary to previous theory, that only social comparisons are related to perceived fairness, yet both comparisons are significantly related to satisfaction in an additive manner. Social comparisons explained more variation in satisfaction and dominated responses to more specific measures of affect. Partial support for specific predictions derived from equity theory and expectancy theory are reported. The overall results are interpreted as demonstrating the importance of the salience of frames of reference in reward evaluation.Estabilished practices create expectations, and since men have traditionally received greater rewards than women for the same services, they expect disproportionate rewards and tend to be disappointed if they do not get them. But these expectations have nothing to do with investments, and neither are they rooted in a conception of justice. (Blau, 1964, p. 195)
Article
Subjects read a story in which five business partners needed to allocate the profits and expenses of the partnership in a fair and reasonable manner. Each of the partners worked independently and produced different gross incomes between 140and140 and 285. The gross incomes were to be divided into expenses and profits. Subjects were asked to fill in fair allocations in an accounting ledger. Three factors were manipulated: the target of the allocation task (either the expenses or the profits), the causal attributions for the differences in gross incomes (internal, external, or both), and whether the subjects were asked to fill in both columns (expenses and profits) or just one.The results supported the hypothesis that the subjects heuristically used equality to make their allocations. Over 70% of the subjects allocated at least one column equally (although the frequency of equality use varied as a function of both the target of the allocation and the attribution given). Subjects allocated the target columns equally more often than non-target columns, even though equality for one column implied inequality for the other. The use of equality was also sensitive to the attribution given for the performance differences. Differences due to external factors, i.e., the number of people showing up at the market, produced the most equal allocations of profits (with unequal expenses) while the internal attribution produced the highest proportion of equal expense allocations (with unequal profits).