The dual nature of fairness: relational and individual differences underlying the division of gains and losses

Executive Summary

Fairness shapes the emergence and development of most social relationships. Archaeological and ethnographic evidence suggest that fairness in allocation of resources might provide an evolutionary advantage. In daily life, fairness in distributing resources is extremely relevant. By investigating the underlying precursors of fair behaviours, scholars can reach a better understanding of the evolution of moral behaviours and the roles they play in current societies. Next to distributing resources however, the distribution of losses often occurs among business or life partners. From a historic point of view, most research in the decision-making field has examined fairness in distributing resources in individual decisions, and devoted little to no attention to the distribution of losses. Moreover, considering that people live in highly complex social environments, many significant decisions are, in fact, made in the context of social interactions. Therefore, the outcomes of some social decisions are dependent on the preferences and choices of others. In line with these insights, the current research project has two related objectives, namely (1) to explore how individual difference impact the distribution of gains versus losses and (2) to explore relational mechanisms and epiphenomena that influence the distribution of gains and losses.

Over the past few decades there has been a steady growth in the interest in how social and emotional information affects economic decision-making. Social decision-making often requires people to integrate several aspects of the choice scenario. Some of this information may be objective, such as the amount of money discussed in a negotiation, whereas some information may be more subjective, for instance the quality of past interactions with the same partner. It is well-known that people’s choices can be influenced by irrelevant information, such as how a problem is framed (Tversky & Kahneman, 1984). The mechanisms through which background information in social decision contexts play a role in decisional outcome are less well investigated. This research project opens new empirical directions by trying to create more theoretical and practical connections between two major fields, namely behavioural economics and organizational behaviour. In terms of theoretical contributions, we aim at contributing to the very limited existing literature related to how losses are distributed. The Ultimatum Game (UG) is one of the most used decision-making tasks derived from behavioural economics. The project will combine classic UG theoretical insights with prospect theory in order to generate an integrative overview of how individual differences and social interactions relate to the distribution of gains and losses. Considering methodological contributions, the project will further explore the ecological validity of the UG. Researchers speculate that the UG decisional context could predict some real-life behaviours, but further research is still needed to empirically support such claims (Heilman & Kusev, 2017; Heilman, 2018). We can also consider some applied contributions that this research project could bring. Studying the topic of fairness and conducting in depth investigations of individual and relational factors contributing to resources allocations, we will be able to draw some important implications for team and organizations in which people have to share various types of gains and losses (e.g., financial or cognitive resources).

Individual differences underlying the division of gains and losses will be investigated using experimental methods in laboratory settings and real-life decisional contexts. Using hybrid methods that mix qualitative and quantitative data derived from field studies and laboratory research we intend to explore relational mechanisms and how they relate to fairness in allocations of gains and losses.