James Konow

Which Is the Fairest One of All? A Positive Analysis of Justice Theories

This paper evaluates numerous positive and normative theories of justice in positive terms, i.e., in terms of how accurately they describe the impartial fairness preferences of real people. In addition, the paper proposes and defends an integrated justice theory based on preferences over four distinct and sometimes conflicting forces. These forces frame the analysis of the individual theories and inspire four corresponding theoretical classes: equality and need, utilitarianism and welfare economics, equity and desert, and context. This synthesis enables one to treat justice rigorously and to reconcile results that often appear contradictory or at odds with alternative theories.

A positive theory of economic fairness

Abstract This paper presents a positive theory of economic fairness which strives for generality by characterizing the fairness values which people share across differing contexts. The study attempts to isolate these underlying values from the more situation-specific perceptual effects (e.g., framing effects) which may have an impact on reported fairness. Central to the proposed theory is the Accountability Principle which, roughly speaking, requires that a persons fair allocation (e.g., of income) vary in proportion to the relevant variables which he can influence (e.g., work effort), but not according to those which he cannot reasonably influence (e.g., a physical handicap). The results of telephone interviews and written questionnaires are presented in support of the theory.

The Hedonistic Paradox: Is homo economicus happier?☆

The “Hedonistic Paradox” states that homo economicus, or someone who seeks happiness for him- or herself, will not find it, but the person who helps others will. This study examines two questions in connection with happiness and generosity. First, do more generous people, as identified in dictator experiments, report on average greater happiness, or subjective well-being (SWB), as measured by responses to various questionnaires? Second, if the answer is affirmative, what is the causal relationship between generosity and happiness? We find a favorable correlation between generosity and happiness (i.e., SWB is directly related to several measures of happiness and inversely related to unhappiness) and examine various possible explanations, including that material well-being causes both happiness and generosity. The evidence from this experiment, however, indicates that a tertiary personality variable, sometimes called psychological well-being, is the primary cause of both happiness and greater generosity. In contrast to field studies, the experimental method of this inquiry permits anonymity measures designed to minimize subject misrepresentation of intrinsic generosity (e.g., due to social approval motives) and of actual happiness (e.g., because of social desirability biases) and produces a rich data set with multiple measures of subjective, psychological and material well-being. The results of this and other studies raise the question of whether greater attention should be paid to the potential benefits (beyond solely the material ones) of policies that promote charitable donations, volunteerism, service education, and, more generally, community involvement, political action, and social institutions that foster psychological well-being.

Fair and square: the four sides of distributive justice

Recent theoretical progress on inequity has left unresolved the crucial question of what constitutes equity. This paper proposes a positive theory of distributive justice, in a framework of inequity aversion, that depends on three general justice principles and context. The current study challenges the view of many previous inquiries that justice is context-specific and instead advances a theory in which justice is context-dependent: context matters, not because of the lack of general principles of justice, but due to its effect on the interpretation of those principles. Results from telephone interviews and written questionnaires are presented in support of the theory.

Is Fairness in the Eye of the Beholder?: An Impartial Spectator Analysis of Justice

AbstractA popular sentiment is that fairness is inexorably subjective and incapable of being determined by objective standards. This study, on the other hand, seeks to establish evidence on unbiased justice and to propose and demonstrate a general approach for measuring impartial views empirically. Most normative justice theories associate impartiality with limited information and consensus. In both the normative and positive literature, information is usually seen as the raw material for self-serving bias and disagreement. In contrast, this paper proposes a type of impartiality that is associated with a high level of information and that results in consensus. The crucial distinction is the emphasis here on the views of impartial spectators, rather than implicated stakeholders. I describe the quasi-spectator method, i.e., an empirical means to approximate the views of impartial spectators. Results of a questionnaire provide evidence on quasi-spectator views and support this approach as a means to elicit moral preferences. By establishing a relationship between consensus and impartiality, this paper helps lay an empirical foundation for welfare analysis, social choice theory and practical policy applications. “There is no objective standard of ‘fairness.’ ‘Fairness’ is strictly in the eye of the beholder... To a producer or seller, a ‘fair’ price is a high price. To the buyer or consumer, a ‘fair’ price is a low price. How is the conflict to be adjudicated?” – Milton Friedman, Newsweek, July 4, 1977.

Mixed Feelings: Theories and Evidence of Warm Glow and Altruism

This paper presents theoretical and empirical analyses of experiments that test competing theories of altruism, including pure altruism (a preference for the well-being of others), warm glow (a good feeling from giving) and impure altruism (a combination of pure altruism and warm glow). These theories produce different predictions regarding crowding out, i.e., the reduction in private donations due to public spending. Variations on dictator experiments involving both students and charities examine the incidence of crowding out and provide a new direct measure of the effect of giving on feelings. The results indicate that crowding out is incomplete, i.e., less than dollar for dollar. The evidence on warm glow suggests mixed feelings: giving may be associated with good or bad feelings, depending on the context. As a way to resolve apparent inconsistencies and reconcile the evidence on crowding out and feelings, this paper proposes a theory of conditional altruism, which extends previous models to incorporate social norms that arise in the workplace, marketplace and laboratory.

ADAM SMITH AND THE MODERN SCIENCE OF ETHICS

Third-party decision-makers, or spectators , have emerged as a useful empirical tool in modern social science research on moral motivation. Spectators of a sort also serve a central role in Adam Smiths moral theory. This paper compares these two types of spectatorship with respect to their goals, methodologies, visions of human nature and emphasis on moral rules. I find important similarities and differences and conclude that this comparison suggests significant opportunities for philosophical ethics to inform empirical and theoretical research on moral preferences and vice versa.

Double Standards: Social Preferences and Moral Biases

A consensus seems to be emerging in economics that at least three motives are at work in many strategic decisions: distributive preferences, reciprocal preferences and self-interest. An important obstacle to this research, however, has been moral biases, i.e., the distortions created by self-interest that can obscure social preferences. Among other things, this has led to disagreement about the relative importance of distributive preferences, reciprocal preferences, or both. This paper describes a simple experiment that decomposes behavior into these three forces and examines their interactions without the confounds that have compromised other designs. We compare the decisions of implicated “stakeholders” with those of impartial “spectators,” who have no stake. Several surprising and interesting results emerge. For example, stakeholders respond less forcefully to kindness and unkindness towards them than do spectators acting on their behalf. We also find an asymmetry in reciprocity: stakeholders punish but do not reward, whereas spectators both reward and punish. This result suggests that the lack of positive reciprocity found in other studies is not due to an asymmetry in underlying reciprocal preferences but rather to a moral bias by stakeholders in the application of that preference. More generally, we find that all three hypothesized motives have important and significant effects on final allocations.

The Economics of Justice

This chapter reviews important contributions to justice research in economics with an emphasis on empirical findings that bear on leading theories of justice. We consider evidence from both incentivized economics experiments and self-reported surveys and explore their relation to justice theories that have been treated in both the descriptive and prescriptive branches of economics. We discuss theories of and evidence on different approaches, including equality, efficiency, equity (or proportionality), desert (or merit), context, and pluralism (or multi-criterion justice), and explore very recent findings on the relationship between fairness and risk-taking.

EXPERIMENTS IN ECONOMICS AND PHILOSOPHY

Not so long ago, many economists and philosophers felt that their disciplines had no use for experimental methods. An experimental study was, by its nature, ‘not economics’ or ‘not philosophy’ – psychology maybe. Opinion has changed dramatically. This issue of Economics and Philosophy represents a collection of recent contributions to experimental research that explicitly deal with empirical findings or methodological questions in the intersection of the two disciplines. To the best of our knowledge, it is the first such collection dedicated to addressing these common interests.