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Constructing Social Preferences From Anticipated Judgments:When Impartial Inequity is Fair and Why?

Abstract

Successful and repeated cooperation requires fairly sharingthe spoils of joint endeavors. Fair distribution is often doneaccording to preferences for equitable outcomes even thoughstrictly equitable outcomes can lead to inefficient waste. In ad-dition to preferences about the outcome itself, decision makersare also sensitive to the attributions others might make aboutthem as a result of their choice. We develop a novel mathemat-ical model where decision makers turn their capacity to inferlatent desires and beliefs from the behavior of others (theory-of-mind) towards themselves, anticipating the judgments oth-ers will make about them. Using this model we can construct apreference to be seen as impartial and integrate it with prefer-ences for equitable and efficient outcomes. We test this modelin two studies where the anticipated attribution of impartialityis ambiguous: when one agent is more deserving than the otherand when unbiased procedures for distribution are made avail-able. This model explains both participants’ judgments aboutthe partiality of others and their hypothetical decisions. Ourmodel argues that people avoid inequity not only because theyfind it inherently undesirable, they also want to avoid beingjudged as partial.

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