Publications
Publications

Equity Concerns Are Narrowly Framed

By: Christine L Exley and Judd B. Kessler
  • Format:Print
  • | Language:English
  • | Pages:87
ShareBar

Abstract

Distributional decisions regularly involve multiple payoff components. In a series of experiments, we show that subjects frequently exhibit narrow equity concerns: individuals apply their fairness preferences narrowly, on a specific component of payoffs, rather than focusing on the broader payoff consequences of their choices. This behavior leads subjects to make different decisions depending on which component of payoffs we frame them to consider. We document narrow equity concerns in an exceedingly simple setting—in which payoff components are small tokens worth 1 cent and large tokens worth 2 cents—and in context-rich applications (e.g., relating to tax policy, worker compensation, and prosocial behavior). Across treatments, we also investigate when narrow equity concerns are more likely to reflect a preference for narrow equity rather than mistakes or cognitive limitations.

Keywords

Equity; Equality and Inequality; Fairness; Perception; Outcome or Result; Resource Allocation; Behavior

Citation

Exley, Christine L., and Judd B. Kessler. "Equity Concerns Are Narrowly Framed." Harvard Business School Working Paper, No. 18-040, November 2018. (Revised August 2021.)

More from the Authors