Constructing Social Preferences From Anticipated Judgments: When Impartial Inequity is Fair and Why?

Successful and repeated cooperation requires fairly sharing the spoils of joint endeavors. Fair distribution is often done according to preferences for equitable outcomes even though strictly equitable outcomes can lead to inefficient waste. In addition to preferences about the outcome itself, decision makers are also sensitive to the attributions others might make about them as a result of their choice. We develop a novel mathematical model where decision makers turn their capacity to infer latent desires and beliefs from the behavior of others (theoryof-mind) towards themselves, anticipating the judgments others will make about them. Using this model we can construct a preference to be seen as impartial and integrate it with preferences for equitable and efficient outcomes. We test this model in two studies where the anticipated attribution of impartiality is ambiguous: when one agent is more deserving than the other and when unbiased procedures for distribution are made available. This model explains both participants’ judgments about the partiality of others and their hypothetical decisions. Our model argues that people avoid inequity not only because they find it inherently undesirable, they also want to avoid being judged as partial.