Evidence from Games Involving Lotteries

Procedural fairness plays a prominent role in the social discourse concerning the marketplace in particular, and social institutions in general. Random procedures are a simple case, and they have found application in several important social allocation decisions. We investigate random procedures in the laboratory. We find that an unbiased random procedure is an acceptable substitute for an unbiased allocation: similar patterns of acceptance and rejection result when either is inserted as a feasible proposal in a sequential battle-of-the-sexes. We also find that unbiasedness, known to be a crucial characteristic of allocation fairness, is important to procedural fairness: in the context of a random offer game, a biased outcome is more readily accepted when chosen by an unbiased random draw than by one that is biased. Procedural fairness is conceptually different than allocation fairness or attribution-b ased behavior, and none of the current models of fairness and reciprocity captures our results. Post hoc extension of one of these models (ERC) suggests that a deeper understanding of procedural fairness requires further investigation of competing fairness norms.

[1]  Gary E. Bolton,et al.  Dictator game giving: Rules of fairness versus acts of kindness , 1998, Int. J. Game Theory.

[2]  Stuart S. Nagel,et al.  Procedural Justice: A Psychological Analysis , 1976 .

[3]  Iris Bohnet,et al.  Fairness and competence in democratic decisions , 1997 .

[4]  A. Roth,et al.  Game-Theoretic Models and the Role of Information in Bargaining , 1979 .

[5]  T. Tyler,et al.  The Social Psychology of Procedural Justice , 1988 .

[6]  J. Brandts,et al.  Hot vs. Cold: Sequential Responses and Preference Stability in Experimental Games , 1998 .

[7]  Gary E. Bolton.  A Comparative Model of Bargaining: Theory and Evidence , 1991 .

[8]  J. Greenberg.  Employee Theft as a Reaction to Underpayment Inequity: The Hidden Cost of Pay Cuts , 1990 .

[9]  G. Charness.  Attribution and reciprocity in a simulated labor market: An experimental investigation , 1996 .

[10]  Donald V. Moser,et al.  Fairness in Ultimatum Games with Asymmetric Information and Asymmetric Payoffs , 1996 .

[11]  Jordi Brandts,et al.  Reference Points and Negative Reciprocity in Simple Sequential Games , 2001, Games Econ. Behav..

[12]  A. Sen,et al.  Maximization and the Act of Choice , 1997 .

[13]  John Duffy,et al.  Does observation of others affect learning in strategic environments? An experimental study , 1999, Int. J. Game Theory.

[14]  Andrew Schotter,et al.  A LABORATORY INVESTIGATION OF MULTI-PERSON RATIONALITY AND PRESENTATION EFFECTS , 1994 .

[15]  George Loewenstein,et al.  Biased Judgments of Fairness in Bargaining , 1995 .

[16]  S. Blount.  When Social Outcomes Aren't Fair: The Effect of Causal Attributions on Preferences , 1995 .

[17]  Klaus M. Schmidt,et al.  A Theory of Fairness, Competition, and Cooperation , 1999 .

[18]  Gary E. Bolton,et al.  Anonymity versus Punishment in Ultimatum Bargaining , 1995 .

[19]  Gary E. Bolton,et al.  ERC: A Theory of Equity, Reciprocity, and Competition , 2000 .

[20]  Axel Ockenfels,et al.  Types and patterns: an experimental East-West-German comparison of cooperation and solidarity , 1999 .

[21]  Gary E. Bolton,et al.  Adaptive Learning versus Punishment in Ultimatum Bargaining , 2001, Games Econ. Behav..

[22]  M. Rabin.  Published by: American , 2022 .

[23]  W. Güth,et al.  An experimental analysis of ultimatum bargaining , 1982 .

[24]  U. Fischbacher,et al.  On the Nature of Fair Behavior , 1999 .

[25]  T. Tyler.  The psychology of procedural justice: A test of the group-value model. , 1989 .