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Is fairness intuitive? An experiment accounting for the role of subjective utility differences under time pressure

Merkel, Anna ; Lohse, Johannes

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Abstract

Economists are increasingly interested in the cognitive basis of pro-social behavior. Using response time data, several authors have claimed that "fairness is intuitive". In light of conflicting empirical evidence, we provide theoretical arguments showing under which circumstances an increase in "fair" behavior due to time pressure provides unambiguous evidence in favor of the "fairness is intuitive" hypothesis. Drawing on recent applications of the Drift Diffusion Model (Krajbich et al., 2015a), we demonstrate how the subjective difficulty of making a choice affects choices under time pressure and time delay, thereby making an unambiguous interpretation of time pressure effects contingent on the choice situation. To explore our theoretical considerations and to retest the "fairness is intuitive" hypothesis, we analyze choices in two-person prisoner’s dilemma and binary dictator games. As in previous experiments, we exogenously manipulate response times by placing subjects under time pressure or forcing them to delay their decisions. In addition, we manipulate the subjective difficulty of choosing the fair relative to the selfish option across all choice situations. Our main finding is that time pressure does not increase the fraction of fair choices relative to time delay irrespective of the subjective difficulty of choosing the fair option. Hence, our results cast doubt on the hypothesis that "fairness is intuitive".

Item Type: Working paper
Series Name: Discussion Paper Series, University of Heidelberg, Department of Economics
Volume: 0627
Place of Publication: Heidelberg
Date Deposited: 30 Nov 2016 09:18
Date: November 2016
Number of Pages: 40
Faculties / Institutes: The Faculty of Economics and Social Studies > Alfred-Weber-Institut for Economics
Subjects: 330 Economics
Uncontrolled Keywords: distributional preferences, cooperation, response times, time pressure, cognitive processes, drift diffusion models
Schriftenreihe ID: Discussion Paper Series / University of Heidelberg, Department of Economics

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