Communication and fair distribution

Abstract

The paper analyses the impact of communication about fairness on individual distribution decisions, and it focuses on three fairness ideals; strict egalitarianism, liberal egalitarianism, and libertarianism. A dictator game experiment with production and two treatments, one with and one without pre-play communication, is run. In the communication phase the individuals face three hypothetical distribution situations involving three fairness ideals. They are asked to choose the fairness ideal they think will imply the fairest distribution in the hypothetical situations. The decision is communicated to the opponents in the distribution phase.The study compares data from the two treatments and tests if communication about fairness has an effect, and how this effect works. Three models of how communication affects distribution are estimated; the integrity model, the compromise model and the self-serving model. The information exchange has an impact on both the weight individuals attach to fairness considerations and on their overall fairness considerations. The weight individuals attach to fairness considerations increases and there is a certain degree of heterogeneity in the population with respect to how most people process information.