Is Equality Fair?

Abstract

This paper attempts to answer the question whether people consider decisions that lead to equal outcomes fair. I find that this is not always the case. In an experiment where subjects are given equal opportunities to choose how to divide money between each other in a two-player game, any strategy is perceived to be fair more than half the time, including the profit-maximizing strategy. The equal divisions that lead to equal outcomes are sometimes considered unfair by both players. Moreover, players frequently punished the others, whose decisions led to equal outcomes. I hypothesize that such punishments occur because people have different conceptions of what a fair outcome and fair punishment are.
Classification-JEL: C

Keywords: Fairness, Equal outcomes, Reciprocal punishment, Fair division, Social values, Effort.