Sharing losses and sharing gains: Increased demand for fairness under adversity

article i nfo There is ample experimental evidence showing that people have a strong preference for equity in wealth allocation and social interaction. Although the behavior of gain sharing and responses to (un)fairness in allocation of wealth has been extensively investigated in studies employing economic exchange games, few studies have focused on how people respond to an unfair division of loss between individuals. In this study we developed a new variant of the ultimatum game and examined the participants' reactions to (un)fairness in both gain and loss sharing. Results from three experiments showed that the rejection rates to unfair offers were generally higher in the loss than in the gain domain. Moreover, participants were inclined to associate loss with "unfair" and gain with "fair", with stronger associations leading to higher rejection rates in the ultimatum game. Furthermore, in subjective rating, unfair offers were perceived as being more unfair in the loss than in the gain domain. These results demonstrate an increased demand for fairness under adversity and the importance of justice in liability sharing.