Favorable Interpretations of Ambiguity and Unstable Preferences for Fairness
38 Pages Posted: 22 Jul 2004
Date Written: June 2004
Abstract
We show that people manipulate their attitudes towards ambiguity when doing so allows them to behave more self-interestedly. In a "dictator" decision subject chose between a "fair" and an "unfair" choice. By choosing the latter, dictators increase their own allocation by decreasing the allocation to the recipient and making the recipient's allocation dependent on a p=0.5 lottery. More unfair allocations were made when the lottery was ambiguous than when it involved simple risk. Overestimation of the expected value of allocations to recipients was higher in ambiguity, indicating that dictators believe the ambiguous lottery to be more attractive. These results are extinguished if dictators are constrained from adopting a favorable attitude towards ambiguity. These findings suggest that the relationship between ambiguity and unfairness results from a self-serving bias involving the adoption of a favorable view of ambiguity, counter to the typical unfavorable view (ambiguity aversion). We also conducted a contextualized dictator game experiment involving hypothetical managerial decisions. In line with the above findings, participants made more unfair decisions when the consequences of their decisions were ambiguous compared to when they involved simple risk, even though they prefer simple risk over ambiguity when there is no conflict between self-interest and social concerns.
Keywords: Social preference,fairness, ambiguity,ambiguity aversion, managerial decision-making
JEL Classification: A13, D63, D64, D89
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
The Dishonesty of Honest People: A Theory of Self-Concept Maintenance
By Nina Mazar, On Amir, ...
-
Stretching the Truth: Elastic Justification and Motivated Communication of Uncertain Information
-
By Christopher K. Hsee, Frank Yu, ...
-
Dishonesty in Everyday Life and its Policy Implications
By Nina Mazar and Dan Ariely
-
The Endowed Progress Effect: How Artificial Advancement Increases Effort
By Joseph Nunes and Xavier Dreze
-
Do Green Products Make Us Better People?
By Nina Mazar and Chen-bo Zhong
-
By Lisa L. Shu, Francesca Gino, ...
-
The Abundance Effect: Unethical Behavior in the Presence of Wealth
By Francesca Gino and Lamar Pierce
-
Social Value Orientation as a Moral Intuition: Decision-Making in the Dictator Game
By Gert Cornelissen, Siegfried Dewitte, ...
-
The Ethical Mirage: A Temporal Explanation as to Why We Aren't as Ethical as We Think We Are
By Ann E. Tenbrunsel, Kristina A. Diekmann, ...