Güth, W., &Weck-Hannemann, H. (1997). Do people care about democracy? An experiment exploring the value of voting rights.

In almost all democratic national elections an individual vote cannot change the election outcome. The fact that many individuals nevertheless participate voluntarily in such elections suggests that people do care about democracy as such. This experiment investigates the value of democratic voting rights by providing participants the chance to sell them. More specifically, an incentive compatible mechanism is used to elicit the willingness-to-accept value of the voting right in the election of the German Bundestag on 16 October 1994. A postexperimental questionnaire makes it possible to assess the relative importance of answers to the frequently raised question: Why do people vote?

 

 

Güth, W., &Weck-Hannemann, H. (1997). Do people care about democracy? An experiment exploring the value of voting rights. Public Choice, 91(1), 27-47.

https://doi.org/10.1023/A:1004972900845

 

Bolton, G. E., &Ockenfels, A. (2000). ERC: A theory of equity, reciprocity, and competition. American economic review, 90(1), 166-193.

We demonstrate that a simple model, constructed on the premise that people are motivated by both their pecuniary payoff and their relative payoff standing, organizes a large and seemingly disparate set of laboratory observations as one consistent pattern. The model is incomplete information but nevertheless posed entirely in terms of directly observable variables. The model explains observations from games where equity is thought to be a factor, such as ultimatum and dictator, games where reciprocity is thought to play a role, such as the prisoner’s dilemma and gift exchange, and games where competitive behavior is observed, such as Bertrand markets.

 

Bolton, G. E., &Ockenfels, A. (2000). ERC: A theory of equity, reciprocity, and competition. American economic review, 90(1), 166-193.

https://doi.org/10.1257/aer.90.1.166

 

 

Fehr, E., &Schmidt, K. M. (1999). A theory of fairness, competition, and cooperation. The quarterly journal of economics, 114(3), 817-868.

There is strong evidence that people exploit their bargaining power in competitive markets but not in bilateral bargaining situations. There is also strong evidence that people exploit free-riding opportunities in voluntary cooperation games. Yet, when they are given the opportunity to punish free riders, stable cooperation is maintained, although punishment is costly for those who punish. This paper asks whether there is a simple common principle that can explain this puzzling evidence. We show that if some people care about equity the puzzles can be resolved. It turns out that the economic environment determines whether the fair types or the selfish types dominate equilibrium behavior.

 

 

Fehr, E., &Schmidt, K. M. (1999). A theory of fairness, competition, and cooperation. The quarterly journal of economics, 114(3), 817-868.

https://doi.org/10.1162/003355399556151

 

 

Konow, J. (2003). Which is the fairest one of all? A positive analysis of justice theories. Journal of economic literature, 41(4), 1188-1239.

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.

 

 

Konow, J. (2003). Which is the fairest one of all? A positive analysis of justice theories. Journal of economic literature, 41(4), 1188-1239.

DOI: 10.1257/002205103771800013

 

Fong, C. (2006). Prospective mobility, fairness, and the demand for redistribution. Working paper, Carnegie Mellon University.

People who believe that their society has few impediments to upward mobility tend to oppose governmental redistribution. This is true even among the poor. Is this because people with this belief expect to be well off in the future, and hence oppose redistribution on self-interested gounds? Or is it because they believe that the less well off have not made the effort to move up, and therefore are morally undeserving of support? This paper uses quantitative sensitivity analysis to examine the robustness of the evidence for each of these views. It finds that the effect of prospective mobility is sensitive to measurement error in current income. In contrast, there is robust support for the view that beliefs about moral worthiness matter.

 

 

Fong, C. (2006). Prospective mobility, fairness, and the demand for redistribution. Working paper, Carnegie Mellon University.

http://dx.doi.org/10.2139/ssrn.638302

 

 

Alesina, A., Di Tella, R., &MacCulloch, R. (2004). Inequality and happiness: are Europeans and Americans different?. Journal of Public Economics, 88(9-10), 2009-2042.

We study the effect of the level of inequality in society on individual well-being using a total of 123,668 answers to a survey question about “happiness”. We find that individuals have a lower tendency to report themselves happy when inequality is high, even after controlling for individual income, a large set of personal characteristics, and year and country (or, in the case of the US, state) dummies. The effect, however, is more precisely defined statistically in Europe than in the US. In addition, we find striking differences across groups. In Europe, the poor and those on the left of the political spectrum are unhappy about inequality; whereas in the US the happiness of the poor and of those on the left is uncorrelated with inequality. Interestingly, in the US, the rich are bothered by inequality. Comparing across continents, we find that left-wingers in Europe are more hurt by inequality than left-wingers in the US. And the poor in Europe are more concerned with inequality than the poor in America, an effect that is large in terms of size but is only significant at the 10% level. We argue that these findings are consistent with the perception (not necessarily the reality) that Americans have been living in a mobile society, where individual effort can move people up and down the income ladder, while Europeans believe that they live in less mobile societies.

 

 

Alesina, A., Di Tella, R., &MacCulloch, R. (2004). Inequality and happiness: are Europeans and Americans different?. Journal of Public Economics, 88(9-10), 2009-2042.

https://doi.org/10.1016/j.jpubeco.2003.07.006

 

Schroth, H. A., &Pradhan Shah, P. (2000). Procedures: Do we really want to know them? An examination of the effects of procedural justice on self-esteem.

This study examined the effects of procedural justice on state-dependent self-esteem using the group-value model and attribution theory to present competing theoretical perspectives. The group-value model predicts a positive relationship between self-esteem and fair procedures. In contrast, attribution theory suggests procedural fairness interacts with outcome favorability to influence self-esteem. Thus, fair procedures will result in higher self-esteem ratings than unfair procedures when the outcome is positive but will result in lower self-esteem ratings than unfair procedures when the outcome is negative. The results of a laboratory and field study provide converging evidence to support the attribution theory predictions. The results of a 2nd laboratory study suggest that self-esteem is influenced by outcome expectancies, not actual outcomes.

 

 

Schroth, H. A., &Pradhan Shah, P. (2000). Procedures: Do we really want to know them? An examination of the effects of procedural justice on self-esteem. Journal of Applied Psychology, 85(3), 462-471.

http://dx.doi.org/10.1037/0021-9010.85.3.462

 

 

Van den Bos, K., Bruins, J., Wilke, H. A., &Dronkert, E. (1999). Sometimes unfair procedures have nice aspects: On the psychology of the fair process effect.

This article focuses on the psychology of the fair process effect (the frequently replicated finding that perceived procedural fairness positively affects people’s reactions). It is argued that when people receive an unfavorable outcome, they may start looking for causes that explain why they received this outcome. Furthermore, the authors propose that unfair procedures provide an opportunity to attribute one’s unfavorable outcome to external causes, whereas fair procedures do not. As a consequence, people may react more negatively after fair as opposed to unfair procedures (a reversal of the fair process effect). The findings of 3 experiments corroborate the authors’ line of reasoning and show that if unfavorable outcomes strongly instigate attribution-seeking processes, a reversal of the fair process effect indeed can be found. In this way, these findings show that sometimes unfair procedures have nice aspects.

 

 

van den Bos, K., Bruins, J., Wilke, H. A. M., & Dronkert, E. (1999). Sometimes unfair procedures have nice aspects: On the psychology of the fair process effect. Journal of Personality and Social Psychology, 77(2), 324-336.

http://dx.doi.org/10.1037/0022-3514.77.2.324  

Benz, M., &Stutzer, A. (2002). Do workers enjoy procedural utility?. Applied Economics Quarterly 49(2), 149-172.

People are likely to obtain utility not only from actual outcomes, but also from the conditions which lead to these outcomes. This paper empirically tests the notion of procedural utility for the context of work relationships. Using a large survey among British workers, we find substantial procedural effects on the utility workers derive from their pay. Utility from pay is not only strongly influenced by economic outcomes (the pay levels workers get for given inputs), but also by the way pay is determined. The findings are robust to a series of alternative explanations.

 

 

Benz, M., &Stutzer, A. (2002). Do workers enjoy procedural utility?. Applied Economics Quarterly 49(2), 149-172.